The International Energy Agency (IEA) says offshore wind power has the capacity to meet all of the world’s electricity demand and is set to be a “game changer” for energy systems, says a Financial Times’ report, but that will require doubling the pace of expansion to meet the world’s climate targets.

The Paris-based institution estimated investment in the technology is growing 2.2 percent a year, putting it on track to raise $840 billion over the next two decades. But to reach goals for sidelining fossil fuel that funding must reach 4.4 percent annually or $1.2 trillion during the period.

The IEA report, focused on one of the fastest emerging technologies in the energy business, indicates the scale of the challenge in shifting the world’s electricity generation business away from fossil fuels.

Bloomberg quoted IEA executive director Fatih Birol as commenting: “In the past decade, two major areas of technological innovation have been game-changers in the energy system by substantially driving down costs — the shale revolution and the rise of solar PV. Offshore wind has the potential to join their ranks in terms of steep cost reduction.”

Indeed, the energy watchdog says the falling costs of offshore wind would make it competitive with fossil-fuel energy generation within the next decade, forecasting that the global average cost of power generated by offshore wind would drop 40 percent by 2030, according to a Financial Times’ report. The IEA also says the expansion of offshore wind could avoid 5 billion to 7 billion tons of CO2 emissions from the global power industry.

The technology for offshore wind has boomed in recent years and is set to grow in new markets, including the United States and China as the cost of installations sharply declines. Still, the IEA report anticipates 20 gigawatts of new offshore capacity being installed annually, only half of the 40 gigawatts-a-year pace that is needed to hit global carbon emission targets.

Mike Consol (m.consol@irei.com) is editor of Real Assets Adviser. Follow him on Twitter @mikeconsol to read his latest postings.