Global offshore wind farm capacity will grow at a compound annual rate of 32 per cent in the coming decade, according to a new report by energy consulting firm ODS-Petrodata.

The International Offshore Wind Market to 2020 report predicts that by the end of 2020 global offshore wind farm capacity will have soared to 55 gigawatts, or enough to power almost 37 million European homes. Current installed capacity is under two gigawatts.

Based on an analysis of more than 700 projects and prospects in the company's database, ODS-Petrodata forecasts USD 61.4 billion of capital expenditure in the sector between now and 2014. For 2016 to 2020, total capital expenditure could be double that.

"Although the credit crisis and other constraints have tempered the market, there is clearly a huge business opportunity here," says David Gault, Renewables Manager at ODS-Petrodata. "These are big industrial projects, and it will take lots of equipment, manpower and innovation to get them built. Now is a great time for companies in other sectors, such as offshore oil and gas, to assess whether they can grab a piece of the action."

Bottlenecks in the supply chain are already being relieved by new entrants. Several emerging European manufacturers of offshore-rated turbines will challenge the dominance of Siemens and Vestas in the next few years, and will later be joined by a batch of Asian manufacturers, including South Korean conglomerates such as Hyundai and at least 10 Chinese firms.

ODS-Petrodata's research on turbine installation vessels indicates that the current shortage of these units could ease quite quickly, if all the vessels currently under construction are delivered on schedule and those in the design phase are built as planned. This will ultimately depend on access to finance, although some potential owners are major civil construction firms with substantial internal resources.

The UK currently leads the way for both installed capacity and projects under construction, but it may experience a lull in activity in 2013 and 2014. Germany will more than take up the slack, and will go on to become the industry's power house from 2014 onwards. China and the USA will also be very significant players in the longer term.

There is a strong trend towards projects being built in deeper water further from shore, and this should create opportunities for innovative installation techniques, new vessel designs, foundations that can be used in deep water, cables that carry power over long distances, and new ways of tackling operations and maintenance challenges.