The worldwide offshore wind industry is expected to see almost $1trillion (£820billion) in new investment in the next few years.
And the sector will be particularly attractive to the big oil and gas producers, as offshore wind could be much more profitable than new hydrocarbon projects.
A new study into the offshore wind prize was released yesterday by Wood Mackenzie.
Akif Chaudhry, principal analyst, corporate research, at the Edinburgh firm, said: "No longer in its infancy, offshore wind is a proven technology on course to play a key role in the decarbonisation of the global economy.
“Over the next decade, the industry will attract almost $1trillion in new investment.
“A growing number of competitors are flocking to take advantage of the massive opportunities that will be created by the boom.
“The (oil and gas) majors – notably the European majors – are no exception. Right now, their share of the market is small, but ambition is ramping up as they bet bigger with their investments in the zero-carbon value chain. And there is all to play for as the offshore wind industry scales rapidly and globally.”
Cash margins
The principal analyst said the upstream sector has long analysed cash margins on a per barrel of oil equivalent (boe) basis.
He added: "This well-understood metric reveals how much operating cashflow upstream oil and gas assets generate per unit of production.
"It's especially useful for articulating cash generation capacity and benchmarking portfolios.
"Conventional analysis of renewables pitted against oil and gas investment usually focuses on relative risk and returns. But comparison with the legacy business needs new metrics.
"Our new cash-margin metric - operating cash flow per gigajoule equivalent - goes beyond traditional comparisons. And it reveals that offshore wind comes up trumps.
"Drawing on composite data from our Lens Upstream and Lens Power platforms, our study shows how a group of renewable leaders' offshore wind portfolios stack up against the majors' oil and gas portfolios on this key metric.
"Tracking this asset-by-asset data demonstrates that offshore wind will deliver 25% higher unit operating cash margins in comparison to new field oil and gas projects.
Trumping deepwater
"Even the lowest offshore wind portfolio average operating cash margin is above the upstream average. And the renewable technology's margins trump deepwater - Big Oil's highest-margin asset class.”
Mr Chaudhry said offshore wind's strong operating cash-margin performance shows that the financial prize is more than simply long-term and steady cash flows.
"Such a cash wedge within a business is a good way to support other portfolio areas or, indeed, a significant dividend commitment, and to hedge exposure to carbon and hydrocarbon prices.
"Returns do, of course, matter. Falling IRRs (internal rate of returns) from offshore wind projects will not be sustainable if the sector is to attract the capital required for it to play its part in meeting global climate goals. Mid-single-digit returns will not be acceptable."
The principal analyst went on: "Offshore wind is not without challenges - dark clouds of supply-led cost inflation and rising cost of debt are looming large.
"The demands of next-generation technology mean that massive investment will be needed to back new tower production facilities.
"But, after years of managing volatility in oil and gas, the majors are equipped to get the balance between risk and return right. And they are flush with deep pockets of cash to take advantage of the huge upcoming opportunities.”
ScotWind projects
Potential offshore wind sites off Scotland are already proving very popular with developers.
In January, Crown Estate Scotland announced the outcome of the first Scottish offshore wind leasing round in over a decade.
Seventeen projects were selected for ScotWind out of a total of 74 applications.
Simon Hodge, chief executive of Crown Estate Scotland, said at the time: "Today's results are a fantastic vote of confidence in Scotland's ability to transform our energy sector. We've now taken a major step towards powering our future economy with renewable electricity.
"In addition to the environmental benefits, this also represents a major investment in the Scottish economy, with around £700million being delivered straight into the public finances (from option fees paid by successful applicants) and billions of pounds worth of supply-chain commitments.
“The variety and scale of the projects that will progress onto the next stages shows both the remarkable progress of the offshore wind sector, and a clear sign that Scotland is set to be a major hub for the further development of this technology in the years to come."