In total, companies are planning to spend about US$13.6 billion by 2009 on offshore projects totalling about 7,700 megawatts.

“Although onshore projects are currently cheaper, the European wind power sector is moving offshore where wind regimes are better but economic and technical challenges greater,” the analysts said.

The industry is set for strong growth, encouraged by government incentives, they said.

The United Kingdom leads European Union nations with 664 proposed turbines in the period, while Germany will install 494, partially because its projects will use larger machines, the The Refocus Marine Renewable Energy Report found.

Spending on offshore power generation was low compared with expenditure at the beginning of the decade, but growth would resume in 2005 and spending would rise rapidly to more than US$4 billion a year by 2009, according to the study.

“Present proposals call for 2,333 turbines to be installed, a massive challenge for the installation contractors,” report author Adam Westwood said.

The growth is set to peak in 2008 when 827 turbines are expected to be placed offshore.

Based on developers’ announced plans about turbine size, annual installed capacity would grow that year, even though unit numbers would fall.

This is because larger five-megawatt class machines would be used instead of the 2-3MW units currently being built, Westwood said.

“If larger turbines are available at the time of installation they will be favoured," he said.

"An example of this is the ‘Kentish Flats’ wind farm where 3MW turbines were eventually chosen to replace the 2MW turbines previously selected, at a stroke increasing the wind farm’s capacity by 50%.”

The report’s modelling considers each proposed renewable energy project, assessing its viability compared with government policy, financing, supply and contractor demand.