Jul 06, 2020

The Submarine Cable Market Rises as the Industry Development of Offshore Power Accelerates

Wind power generation is one of the most mature technologies, the most large-scale development conditions, and the best commercial development prospects in the field of renewable energy. The global wind energy is about 2.74×10^9MW, of which the available wind energy is 2×10^7MW. Under the existing wind power technology conditions, wind energy resources in China are sufficient to support more than 1 billion kilowatts of wind power installed capacity, which will be an important part of the future energy and power structure.

Offshore Wind Power Has Obvious Advantages

In 2019, the wind power market in China maintained rapid growth, with new installed capacity accounting for 48% of the world's total. Among them, onshore wind power added 26.2 million kilowatts, an increase of 36%, offshore wind power added 2.7 million kilowatts, an increase of up to 57%.

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The hours of offshore wind power utilization exceed that of onshore wind power. The annual average utilization hours of onshore wind power are about 2,200. Though the utilization hours of offshore wind power are generally different according to different resource conditions, the average utilization hours can reach more than 3,000 hours.

Compared with onshore wind power, the current single-unit capacity of offshore wind power in China is mainly 2.5-5MW, which is higher than that of onshore wind power mainly based on 2MW type. With the improvement of the technical level, the single-unit capacity is expected to increase, the advantages of offshore wind power generation will be more significant, promoting the development of the industry chain rapidly.

At present, the cumulative installed capacity of global offshore wind power has reached 23GW, accounting for about 4% of the total installed capacity of the world. As an important driving force for the global energy transformation, Europe has adjusted its investment in onshore wind power, focusing on offshore wind power. In 2018, the cumulative installed capacity of offshore wind power in Europe reached 18.50GW, accounting for 80% of the world's total installed capacity.

In 2020, new installations of wind power worldwide will reach more than 65GW, of which offshore wind power installations may reach 7GW. Among them, offshore wind power installed capacity in China may reach 4GW.

Offshore Wind Power Industry Chain

The industrial chain of offshore wind power and onshore wind power is roughly the same, which can be summarized as that the upstream mainly includes raw material production and parts manufacturing, midstream complete is chiefly the machine and related tower submarine cable, and other important facilities manufacturing, and the downstream is mainly refers installation and operation and maintenance.

Submarine Cable Is an Important Part of Offshore Wind Power Project Development

The submarine cable is an important part of the development of offshore wind power projects, and also the main difference between offshore wind power and onshore wind power, accounting for about 10% of offshore wind power investment.

Submarine cables are mainly divided into three categories according to its function, of submarine optical cable, submarine cable, and submarine photoelectric composite cable. Among them, submarine optical cables are mainly driven by the explosive growth of global traffic, which will be widely used in global data exchange and island communication. In addition, the driving forces of submarine cables and submarine photoelectric composite cables are the needs of offshore wind power, interconnection of transnational power grids, offshore oil and gas development, and remote island transmission.

Submarine photoelectric composite cables are currently widely used in offshore wind power, which directly reduces the overall cost and investment of the project, and indirectly saves the workload of marine surveys and later routing maintenance.

The offshore wind farms constructed in China in the past two years used submarine photoelectric composite cables for power transmission and remote control. It is estimated that in 2020 and 2021, the market demand for submarine cables used in the offshore wind power sector will be 1,143 million USD and 1,257 million USD, an increase of 25% and 10% year-on-year.

At present, the market structure of the submarine cable is relatively stable, mainly occupied by Zhongtian Technologies, Ningbo Orient Wires & Cables, and Qingdao Hanhe Cable, and Hengtong Optic-electric. After more than ten years of development, domestic enterprises have basically realized the localization of submarine cables. Considering the barriers of the submarine cable industry and the first-mover advantage of existing companies, we keep the opinion that the new entrants will be less likely to reshape the pattern in the future, and the pattern of the submarine cable industry will remain stable.

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