As the
US shuts up shop to offshore wind for the foreseeable future, the sector's attention is glued to Europe's northern seas.
Challenges nevertheless loom in almost all markets of the Northern Seas, from flopping tenders to political turmoil.
Recharge has taken a closer look at which markets are hot, or not, - poring over everything from government stability, grid issues, demand, tenders and their industrial base, and ranked them by how promising they are to invest in.
Breakdown of the rating scale:
- 1 represents the lowest rating (think twice before putting your money in this market)
- 2 indicates a below-average rating (the market is starting up but still immature)
- 3 represents a neutral rating (the market is developed, but there are some challenges)
- 4 indicates an above-average rating (the market is expanding well but some issues need to be resolved)
- 5 represents the highest (most promising case for investors).
UK
The largest offshore wind market outside China – with 15.9GW installed at the end of last year – has recently run into some challenges.
Most prominent was
Orsted’s decision to halt development of its giant Hornsea 4 project in the North Sea, just nine months after the Danish utility secured a contract for difference (CfD) for it. The stop to the 2.4GW project – for now at least – rendered the
government’s already ambitious 43-50GW goal for wind at sea by 2030 almost impossible.
Key questions, including whether the UK will switch to a zonal power market, a move deeply unpopular with developers due to the uncertainty it will cause,
need to be answered before the next round of CfD tender (AR7). The CfD system is itself being
radically reformed, with further
controversial proposals also still being consulted on.
“This uncertainty is bad for the supply chain,” Nils de Baar, Vestas president for Northern & Central Europe, said at a recent event in London.
Other factors, including cost inflation, supply chain bottlenecks and rising financing costs, could also mean that CfD strike prices need a significant hike if projects are to be profitable.
Interestingly, Benj Sykes, UK country manager for Orsted, stressed that despite “a bit of a febrile mood” in the industry right now, the “long-term fundamentals" are only getting stronger.
The UK’s track record of stable policies leading to a continuous offshore wind build-out works in its favour as a destination for large offshore wind investments.
Our ranking: 4
Germany
Germany’s offshore wind market has advanced steadily in recent years, and with just over 9GW installed is Europe’s second-largest.
But it is
unclear whether the new government under Chancellor Friedrich Merz will continue to push for wind at sea as much as its predecessor coalition, which featured the strongly pro-offshore wind Green Party.
Merz’s economics and energy minister,
Katharina Reiche, has avoided mentioning any targets for offshore wind. At a recent Berlin event, she called the renewables rollout "completely excessive", raising doubts that the new administration will keep the goal, set by Reiche's predecessor Robert Habeck, of reaching a whopping 70GW by 2045.
Even some within the offshore wind industry, including RWE CEO Markus Krebber, have
lobbied for a more modest 50GW target, citing the threat posed by inter-farm wake losses and soaring grid connection costs for projects further out to sea.
Developers, led by oil & gas giants such as TotalEnergies and BP, have surprised the market in recent years by agreeing to
pay billions of euros for the right to build wind farms in areas a long way from shore in Germany’s North Sea exclusive economic zone, while snubbing markets such as Denmark and halting giant projects in the UK as Orsted did with Hornsea 4.
But interest may be waning.
In the last gigascale tender for the N-9.4 far-offshore zone, only two bidders remained in the game when negative bidding kicked in.
TotalEnergies won again, but with a pledge to pay a much more moderate €180m ($203m), prompting wind groups to
demand that the government change its tendering system in favour of two-sided CfDs or risk rising power prices in the long term, project cancellations and jeopardising domestic value chains.
Ranking: 4
The Netherlands
After years of continuous tenders, exemplary pre-development by the government and transmission system operator (TSO) TenneT, and ambitious targets, the Netherlands has for some time been the darling of Europe’s offshore wind industry.
With 4.7GW of installed wind farms at the end of last year, the country has cemented its position as the continent’s third-largest market.
But advances have stalled somewhat since a populist-right-led government took office in mid-2024. The volume of an offshore wind tender this year was cut to 1GW, from 3GW planned previously. Climate minister Sophie Hermans justified this with expected
lower electricity demand that would undermine the business case for developers at a time the wind industry is under pressure from higher prices.
The current tender combines negative bidding (although not to as high a level as in Germany) and qualitative criteria. A target of installing 21GW by late 2032 remains in place.
After the recent collapse of the coalition government, snap elections will be held in late October.
If a more moderate coalition takes over, the Dutch offshore wind expansion may gain speed again.
Ranking: 4
Denmark
Denmark is the birthplace of offshore wind; the first offshore wind turbines were installed there in 1991 off the island of Lolland. Since then, the country with only six million inhabitants has put 2.7GW of wind farms in the water.
These meet 26% of its electricity needs – the highest share anywhere in the world (the UK ranks second with a distant 17% of wind at sea in its power mix). The West's largest wind OEM, Vestas, is headquartered in Denmark, which also boasts leading vessel suppliers and state-of-the-art ports.
But ambitious plans to more than quadruple the offshore wind capacity, kicking off with a two-phase near-6GW tender, have run into difficulties. Last year,
no bids were made for three North Sea sites with a combined capacity of 3GW as the industry shunned tendering conditions that included the state taking a 20% share in each project and uncapped negative bidding for the sites.
Danish demand may also not be sufficient for so much new capacity, while HVDC power lines from neighbouring Northern Germany to industrial and population centres to the south are still not ready. A second 2.8GW auction for sites in the Danish Straits was cancelled after the tender for the North Sea sites flopped.
The government has since reached an
agreement with the opposition to overhaul the tendering scheme, offering up to DKr55.2bn ($8.72bn) in combined CfD support for two North Sea sites and one in the Kattegat that links the North and Baltic Seas. A new 3GW auction is slated to be launched later this year (bid deadlines are set for 2026 and 2027), with the option of overplanting and the integration of power-to-X technologies. It will be a test of whether Denmark can continue to punch considerably above its weight in offshore wind.
Interesting detail: the government, when announcing the cross-party agreement, said it expects 20MW turbines to be installed at the sites of the upcoming auction, although this doesn’t amount to an official requirement. Such giant turbines are only
on offer from Chinese OEMs and
soon probably from Siemens Gamesa, but not so far from domestic champion Vestas.
Another 3.6GW in capacity across nine projects from the previous open-door scheme, without state support, can proceed with development (the Danish Energy Agency rejected another 24 projects under the scheme). Among them are the 240MW Jammerland Bugt and 165MW Lillebælt South projects that recently received a permit.
Ranking 3
Belgium
Despite having a tiny coastline, a mere 67 kilometres, Belgium is the hidden champion of European offshore wind. On a bedrock of consistent policy, the country had quietly built up an operating capacity of 2.3GW by the end of last year, more than that of neighbouring France, with its far longer coasts.
And Belgium is building the world’s first artificial energy island, which is slated to bundle and then connect a further 3.5GW of North Sea wind capacity to the mainland, the so-called Princess Elisabeth zone. Big players such as EnBW have said they are interested, but were
concerned about very tight tendering and construction deadlines for the new wind farms.
A first auction for a 700MW site was kicked off late last year under the previous government. But the current administration – led by a Flemish nationalist – just
halted the auction, citing legal uncertainties, an unrealistic calendar and a vague financial framework. The government now plans to re-tender the site early next year.
The Belgian government, due to cost concerns, has also recently
postponed high voltage direct current (HVDC) components of the energy island. As a result, only one further auction with 1.4GW capacity is slated to go ahead in 2026, while a second tender of the same size hinges on two HVDC converters being installed at a later time.
Ranking 3
France
After first offshore wind tenders in 2012 and 2014, it took France a decade to get its first offshore wind farms built. Lengthy court challenges, administrative hurdles, abrupt policy changes and protests by fishermen for years tested the nerves of developers. Local energy giant TotalEnergies last year complained about the country’s slow progress in renewables deployment, and said it would invest in offshore wind projects in other countries, where electricity can be produced more quickly to supply its clients.
But the pace of deployment has picked up now.
The country at the end of last year had 1.5GW of turbines in the water. The government's latest targets are for 18GW of operational offshore wind by 2035 and 45GW by 2050, but
experts doubt the near-term target is realistic, given permitting constraints and legal challenges.
France succeeded in attracting a solid offshore wind manufacturing base, including a Siemens Gamesa turbine factory, a blade plant by GE Vernova unit LM Windpower, and a nacelle factory for GE’s Haliade-X turbine (the US company has frozen its offshore wind ambitions for new projects, however).
France has also had some success in ushering in a wave of public-private investment for dedicated port facilities such as Saint-Nazaire, in the northern Bay of Biscay, and Port La Nouvelle, in the western Mediterranean.
After the trouble in realising projects from the first auctions, the government has greatly improved its tendering system, which now includes a series of public consultations, a competitive dialogue with the industry and pre-qualification rounds – resulting in a slow but steady flow of awards.
The government late last year
pre-qualified 12 potential bidders for its AO9 round with 2.9GW on offer across four sites in the Mediterranean and Atlantic, and as part of the AO10 tender, plans to
offer up to 9.2GW in capacity. Only 2GW of that is fixed-bottom, while the remainder is slated to be floating.
Strong support for floating technologies is also France’s most important contribution to the global offshore wind industry. After BW Ideal brought its
pioneering 2MW Floatgen demonstrator platform into the water in 2018, an EDF-led consortium last year grid-connected the first turbine of the
24MW Provence Grand Large (PGL) array.
This and three other pilot arrays are being followed up by a series of utility-scale floating wind farms of 250MW or more in capacity. Elcio and BayWa r.e. was allocated the first of them last year, the
270MW Pennavel project south of Brittany from the AO5 tender, with a €86.45/MWh bid.
Two more of the 250MW floating sites were allocated late last year with similar bids, which are considered “competitive” by the government, but too low for a floating site by industry groups, who
caution against using the French results as a benchmark for the wider floating sector. Experts warned the projects were "not likely to be feasible"
unless cheap Chinese turbines are used.
Offshore wind in France, next to lengthy development times, is increasingly exposed to political risks as the far-right National Rally (RN) and also conservative parties are hostile to wind power. This has again been made clear last month, when a
moratorium on new wind power was temporarily approved by France’s National Assembly (it was overturned later). The next elections could bring the far-right to power, many fear. The country’s very strong nuclear lobby will also make sure that other technologies don’t endanger its dominance in France’s power mix.
Ranking: 3
Norway
Norway, with only 101MW of operating offshore wind capacity, hasn’t become a major market yet.
However, the outgoing government’s target of installing 30GW of offshore wind by 2040 – coupled with deep experience in the offshore oil & gas sector and a solid shipbuilding industry – has recently turned the country, with its long North Sea and North Atlantic coastlines, into a seemingly highly promising market.
Norway's offshore wind dream has suffered several serious setbacks, though.
National oil & gas giant Equinor, which runs the pioneering 88MW
Hywind Tampen floating array off Norway,
paused development in 2023 of its gigascale Trollvind floating wind project, which was supposed to deliver power to two oil and gas fields as early as 2027.
Torturous delays to Norway’s first offshore wind tenders, coupled with pressures affecting the industry in general and floating wind in particular (cost inflation, supply chain bottlenecks, rising financing costs), cooled down investor interest.
Japanese-owned developer Parkwind and Ingka Investments, the investment arm of the owner of furniture giant Ikea, last year
won Norway’s first large-scale offshore wind auction, for the 1.5GW Southern North Sea site. It is bottom-fixed, unlike most areas in Norway, as the country’s continental shelf falls away sharply.
Deteriorating conditions in an immature market led many previously interested parties to abandon the long-awaited Utsira Nord tender; among them state-owned
renewables giant Statkraft,
Macquarie-owned Corio Generation, Shell, the Engie-EDPR tie-up Ocean Winds, and Aker unit Mainstream Renewable Power.
After the flop in the massive Danish tender and Orsted’s halting of Hornsea 4 in the UK, there are doubts whether there will be enough bids for Utsira Nord.
Six companies or bidding consortia could still be in the race to be allocated one of the three project areas at Utsira Nord in a qualitative first auction and, at a later ‘maturation’ stage, win up to NKr35bn ($3.45bn) in state aid. Among them are Equinor, EDF, Ingka Investment and EnBW.
Ranking: 3
Poland
Poland has no turbine in the water yet, but it still made it on Recharge’s list of Europe’s most promising offshore wind markets. In fact, it not only made it, we're giving it our top ranking: 5.
The country already has a vibrant offshore wind supply chain, is readying its ports for wind at sea installation, and targets having 18GW of operational offshore wind capacity off its Baltic Sea coast by 2040 – which is backed both by the current conservative-liberal led government under Prime Minister Donald Tusk and the right-wing populist opposition of the PiS party.
Suppliers that have set up shop in Poland include Vestas, which has just started serial production on its 15MW turbine at its
brand-new factory in Szczecin harbour, Spanish offshore tower company Windar that is slated to begin manufacturing next year, and French cabling giant Nexans.
First projects are entering the construction phase or will soon do so.
Among them are the 1.4GW twin projects of Baltyk 2 and 3, for which
Equinor and its Polish partner Polenergia took an investment decision in May. Orsted, together with Polish utility PGE Polska Grupa Energetyczna, has also this year taken an investment decision for its 1.5GW Baltica 2 project, which is expected to be fully commissioned in 2027.
And
Orlen Neptun, the offshore wind unit of Polish refiner and Eastern Europe’s largest company Orlen, and Northland Power this year started to install the first monopiles at its 1.2GW Baltic Power array. The first Vestas V236-15.0MW was installed at the array this week.
The above projects are part of a first 5.9GW batch of pre-developed Polish offshore wind projects that can count on 25 years of CfD support without having had to bid in a tender.
Poland is slated to auction off a further 12GW of capacity by 2033, with a first 4GW CfD tender to be held in mid-December of this year.
Ranking: 5
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