Recently, Boston Consulting Group published the article "Is the offshore wind power strategy life or death?" (hereinafter referred to as "the report"), describing the views on the future prospects of the offshore wind power market. The following is the full text of the translated version of the "Report" for energy researchers' reference.

Offshore wind power may shift from being marginalized to becoming the main source of renewable energy globally. Industry insiders believe that decision-makers will take action to promote the accelerated long-term development of offshore wind power in the most developed regions of Europe. This support will drive the development of global markets (reaching a cumulative total of 700 billion euros by 2030) - exceeding most market expectations. However, this is not a given plan. Whether we see the market accelerating or everything developing as usual, it all depends on better bidding, grid investment, public support policies, and changes in the electricity market. Wind power developers, installers, and suppliers need to make informed decisions about the constantly changing environment and better understand the risks and opportunities associated with different scenarios to demonstrate their future business models.

1. The Market Potential of Offshore Wind Power

European offshore wind power developers are starting to submit zero subsidy bids in bidding, with the expectation that a larger market will drive further industry specialization, allow large-scale production, and drive cost reduction driven by technology. All of these factors need to increase profit margins and enable the company to achieve substantial profits.

In April 2017, German public utilities Energie Baden W ü rttemberg (EnBW) and Denmark ? rsted (formerly DONG Energy) won three of the four zero subsidy projects in their first bidding in Germany. The recent bidding has further clarified the trend of price decline.

Related to these bidding is the expected decrease of Cost of electricity by source. By 2025, the Cost of electricity by source of offshore wind power will be reduced from more than 100 euros/MWh to less than 50 euros/MWh, and the wholesale price will return to the current level. And this is a realistic scenario. So far, offshore wind power has played the second leading role among many types of renewable energy. Even in Europe, offshore wind power accounts for only 8% of renewable energy generation. One reason is that the risks and project costs are higher, and the operations and maintenance activities are more complex.

At the same time, generous subsidies and limited capacity benefit various participants and business models. Although European governments have shifted to bidding in France since 2012, the demand for policy incentives (such as localization and location) means that bidders can rely on national support. Therefore, the industry lacks scale, and offshore wind power is not as mature as solar or onshore wind power in terms of key elements.

But the situation is changing. Governments around the world are allocating a portion of project costs to develop bases and build grid interconnection facilities. These changes have forced developers to focus on the construction and operation of wind farms. Participants are also constantly evolving. Four large energy companies, ? rsted, Vattenfall, E.ON, and RWE, account for over 40% of Europe's offshore wind power installed capacity