LONDON, Nov. 8, 2019 /PRNewswire/ -- The IEA has released a report on the global offshore wind sector that predicts massive growth in installed capacity over the coming 20 years.
The direction of travel is not surprising given prevailing geopolitical dynamics as well as the huge falls in the cost of electricity generated through this method. Offshore wind impacts several commodity areas covered by CRU and here we make some initial comment for some of those areas in response to this latest outlook.
Steel: strong demand growth area for heavy plate, but with longer term risks.
The key steel product exposed to offshore wind is heavy plate. This is used in construction of the turbine towers, but especially in the foundations. Conversations with companies in the sector suggest that typical offshore projects consume plate at a magnitude of 100,000t or more. These are therefore substantial demand generators for plate mill output, given that the mean capacity of reversing plate mills in the EU28 is 400kt/yr.
The offshore wind sector has been focused on Northern Europe to date but is growing beyond that region. In Europe it now consumes a material proportion of total reversing mill plate; around 10% of total annual volumes for the region. Growth beyond Europe therefore has the potential to add significant new amounts to plate demand in other regions, while growth in Europe is likely to continue on its existing upward trajectory.
Plate demand growth arises not only from volume growth of installed offshore wind capacity, but also from changing intensity of use of plate in that capacity. As water depths increase the amount of steel required per foundation is also likely to increase, in the medium term at least. In a previous Insight, UK offshore wind sector will boost plate demand, CRU has explored the expectations placed on the UK plate supply base from its ambitions to grow offshore wind capacity. In simple terms it seems likely that additional domestic plate capacity could be justified to meet expected strong demand.
Read the full story:
https://www.crugroup.com/knowledge-and-insights/insights/2019/wind-powers-commodities-demand/
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