
Winds of change
Scaling renewable energy capacity to support the sustainable shift
Fleur Greetham
Imke Maassen van den Brink
In recent years, the offshore wind industry has experienced significant growth. Despite the challenges presented by the COVID pandemic, close to 11 GW of new offshore wind capacity was commissioned in 2023, making it the second-best year in the technology’s historical records. Together, Europe and China account for 95% of the 75.2 GW offshore wind installed globally, with Asia now being the largest regional offshore wind market
Looking to the future, to comply with a 1.5° global warming scenario, the International Renewable Energy Agency (IRENA) calculates that the global offshore wind capacity will need to increase nearly sevenfold to 494 GW by 2030 and to 2465 GW by 2050. Within the EU, there are goals for 111 GW of offshore wind energy by 2030 and 317 GW by 2050, with the North Sea Energy Cooperation (NSEC) contributing to this overall goal with the adoption of goals of 76 GW by 2030 and 260 GW by 2050. Given the pace of sectoral development and the challenges that the offshore wind industry is currently experiencing for both fixed and floating technologies, the question is how to ensure that these targets are not missed.
2023, although a historical year for the offshore wind industry in terms of new installed capacity, was also a turbulent one. Europe is currently seeing a slowdown in developments for several reasons.
Several European countries have faced significant permitting delays for offshore wind farms, scaring away developers and investors or resulting in high risk premiums. Since 2023, efforts like the revised EU Renewable Energy Directive (REDIII) and the European Wind Charter have aimed to streamline permitting and address public opposition. These initiatives have led to faster approvals and improved auction designs in countries like Germany, Spain, and France. However, many member states still lag in fully implementing the new rules.
Grid connection delays and the curtailment of offshore wind power also remain a major challenge, and, for some, they are considered the number one bottleneck to the build out of (offshore) wind. The recent Wind Europe report on grid access challenges for wind farms in Europe showed that key European economies such as France, Germany, Italy, Spain, Poland, and the UK are falling behind in preparing their grids for the green energy transition. Despite setting ambitious renewable energy targets, these countries risk higher energy costs, delays in decarbonisation, and a growing susceptibility to power outages and curtailment due to inadequate grid infrastructure.
Rising offshore wind costs have surged significantly after the last few years due to inflation, increasing expenses for materials, labor, and financing costs. AFRY’s recent study for the Dutch Ministry of Economic Affairs and Climate Policy on the current business case for offshore wind in light of the upcoming auctions at IJmuiden Ver Gamma and Nederwiek I sites notes that, in the Netherlands, financing costs rose by 45% between 2020 and 2025, driving a 40% increase in the levelised cost of energy (LCOE).
A major challenge for offshore wind is uncertainty around income streams due to fluctuating energy prices, which is particularly acute in countries where the offshore wind business case is fully exposed to power market risk, such as in the Netherlands. The rigidity of policy support with fixed-price mechanisms, like contract-for difference (CfD) schemes, also creates income uncertainty, as they often fail to adjust for inflation or rising costs, leaving developers unable to cover expenses. In the UK, the cost spike clashed with low CfD auction prices, as seen in the failed AR5 round of 2023. Developers were discouraged from participating, as the low strike prices couldn’t cover rising project costs, stalling new offshore wind projects.
Supply chain bottlenecks in offshore wind projects are another obstacle for offshore wind deployment, causing significant delays due to shortages of installation vessels, cables, and turbine components. The high demand for installation vessels across Europe has far exceeded supply, slowing project timelines. Rising global demand for turbine components and larger turbines further strain the supply chain, as manufacturers can't recover investments quickly enough, limiting innovation and scalability. Finally, the European supply chain faces intense competition from China, where next-generation components are manufactured and offered at lower costs, partly due to government subsidies.
Floating offshore wind is essential for the large-scale rollout of offshore wind in the long term, as it enables wind farms in deeper waters with stronger and more consistent winds, significantly expanding the available areas for energy generation as shallow sites become limited. A notable example is Scotland’s Green Volt floating offshore wind farm, which became the first commercial-scale floating offshore wind project to secure all planning approvals, in April 2024.
Nevertheless, despite such progress, many of the same challenges affecting fixed-bottom offshore wind, such as regulatory delays, grid connection difficulties, and supply chain constraints, are even more pronounced for floating wind. While many European countries, like France, Germany, and Spain, are making steps to support floating offshore wind, the complex and evolving regulatory frameworks continue to delay progress.
New offshore wind installation (MW)

Additionally, connecting floating wind farms to the grid is more challenging due to their remote, deep-water locations. This requires for example dynamic cables to handle constant motion, and still in development floating substations, necessary to transmit electricity.
Floating wind technology is still in its early stages and is significantly more expensive than fixed-bottom offshore wind. Costs related to infrastructure, floating foundations, and mooring systems are much higher, increasing the need for stable income streams or flexible support mechanisms.
The supply chain for floating wind is underdeveloped, with shortages of specialised vessels, turbine components, and cables suited for deep-water environments. In response, the new Labour Government announced it would establish a National Wealth Fund, investing GBP 1.8 billion on upgrading ports across the UK with a view to enable floating development as well as use the Energy Profits Levy, a 35% tax on oil and gas profits, for 8 investment in floating wind.
Floating offshore wind also faces unique challenges, such as more complex and larger port infrastructure facilities needed for assembly and deployment, and the early-stage development of its technology, which add additional hurdles to its large-scale roll-out. In order for both fixed and floating offshore wind capacity to ramp up and put Europe back on a trajectory where it can meet its goals, a number of measures need to be advanced.
Firstly, clear and consistent policy frameworks and roadmaps are essential to the viability of offshore wind investment. In order to attract international developers, which increases the competitiveness of the tenders, governmental bodies need to establish solid offshore wind roadmaps up to and post 2030. Linked to this, clear roadmaps matching the increase in planned offshore wind capacity to industrial sectors where electrification is needed to decarbonise their processes will help to provide a clear signal to the offshore wind industry, especially those involved in finding viable and sufficient PPA offtakes for their output. The Netherlands has partly adopted this, using system integration to secure demand-increasing bids, but demand is still lagging.
Robust and coordinated grid infrastructure is also critical. Many strategic programmes are implemented at a national level, but initiatives such as the North Seas Energy Cooperation, which coordinates developments between members by developing concrete cross-border offshore wind and grid projects (hybrid projects), has the potential to reduce costs and space of offshore developments across sea basins. Another solution is the development of energy corridor projects.
Public acceptance of offshore wind is generally high, but its success relies on public support for new developments and reinforcement of the onshore grid infrastructure. In their report on innovations in permitting, IRENA suggests the implementation of a clearing house mechanism for legal disputes and an acceleration in the permitting and deployment of critical energy infrastructure, such as grids permitting processes. In Greece, grid capacity in designated broader grid areas has been reserved for the integration of offshore wind, instead of being allocated based on the first come, first served principle.
The uncertainty in revenue and rigid policies can also deter investment in offshore wind projects, making it essential for governments to introduce flexible support mechanisms that account for changing market conditions. Examples include indexing subsidies to inflation as Denmark has done or designing more adaptable CfD schemes that allow for adjustments over time.
Finally, Europe needs to support and expand the regional production of critical components like turbines and cables and boost the availability of installation vessels. In the USA, the Biden administration supports offshore wind growth with initiatives like the Inflation Reduction Act, focusing on domestic manufacturing, port upgrades, and vessel expansion to meet its 30 GW target by 2030. Meanwhile, in the APAC region, countries like Japan, South Korea, and Taiwan are strengthening their offshore wind supply chains through investments in local manufacturing, specialised vessels, and port infrastructure.
Continuing with the APAC region, particularly Japan and South Korea, its countries have also been at the forefront of floating wind technology. Japan's Fukushima Forward demo project and South Korea’s planned Ulsan floating wind project of 1.5 GW demonstrate significant progress in developing and deploying floating technology. Europe can learn from the early innovations and technical advancements in these countries to accelerate its own floating wind projects.
While the European offshore wind industry faces significant challenges, including regulatory delays, grid connection issues, and rising costs, the potential for growth remains substantial. By addressing these obstacles through clear policy frameworks, robust grid infrastructure, and flexible support mechanisms, Europe can strengthen its position in both fixed and floating offshore wind technologies. With coordinated efforts, the ambitious targets for 2030 and beyond are within our reach.
