International market research institute Technavio released a report that by 2021, offshore wind power, cross-sea connections (between islands, countries) and offshore oil will become the three terminal application markets for submarine power cables.
Offshore Wind Power
In 2016, the global offshore wind power market demand for submarine power cables exceeded $2.1 billion, accounting for 47% of the total market. Offshore wind turbines generate more power than conventional turbines.
From a regional perspective, more than 80% of offshore wind turbines are installed in Europe. European countries plan to achieve renewable energy accounts for more than 20% of energy by 2030. To achieve this goal, all European countries are cooperating to develop the offshore wind power market. For example, Germany, Spain, Italy and the United Kingdom are all investing heavily in building offshore wind farms.
On the other hand, in recent years, the Asia-Pacific region represented by China and India is increasing investment in offshore wind power. It is estimated that by 2021, the annual compound growth rate of submarine power cables in the Asia-Pacific region will exceed 6%, higher than The global average.
Cross-sea connections, especially between islands or between countries and regions, are mainly achieved through submarine power cables. In 2016, the proportion of cross-sea grid connections to the entire market exceeded 37%.
According to the International Energy Agency, there are more than 1 billion people without electricity in sub-Saharan Africa and developing Asia. In order to achieve power supply in these areas, the demand for submarine power cables will continue to expand. For example, the Indian government has taken plans to meet growing power demand, especially to expand renewable energy generation. The African region is also using the microgrid system powered by renewable energy to achieve stable power supply in off-grid areas.
Technavio Principal Investigator Gaurav said, “The increase in electricity demand is expected to boost electricity imports, which will increase demand for submarine power cables. Access to affordable, stable electricity is critical to life and business. In developing island countries and regions, Submarine power cables will be an important means of improving weak power supply."
In 2016, offshore oil's share of submarine power cable demand accounted for about 10% of the total market. The depletion of onshore reserves has forced companies to focus on remote areas or oceans to find new reserves, which has been driving offshore drilling services. Compared to onshore drilling, offshore drilling takes longer, which also leads to long-term contracts for the rig. The shift to offshore drilling and ultra-deep drilling has increased the complexity of the entire process, spurring the market's growing demand for submarine power cables.