According to analysis by Rystad Energy, approximately 137 offshore substations are slated for installation off continental Europe by the end of this decade, necessitating a total investment of $20 billion. The study highlights that over 120 of these facilities will be deployed between 2024 and 2030, with an estimated expenditure of around $18 billion.
The increase in substation developments is attributed to the expanding scale of offshore wind projects and their considerable distance from shore, particularly those exceeding 1 gigawatt (GW) in capacity, which require multiple substations. This trend is expected to drive annual spending on offshore substations significantly, rising from an average of $1.4 billion per year from 2015 to 2023 to a projected peak of $8.4 billion in 2030.
Offshore substations play a crucial role in minimizing power transmission losses for projects over 200 megawatts (MW) and situated more than 15 kilometers offshore. They also support broader energy initiatives, such as electrifying offshore oil and gas platforms.
Petra Manuel, senior offshore wind analyst at Rystad Energy, emphasized the sector's growth prospects, stating, “We will see a substantial increase in spending in the offshore substation market this decade. This is linked to growing installed capacity in Europe and will be further amplified when floating wind technology takes off.”
The report notes that while jacket foundations have been predominant for offshore substations, supporting approximately 70% of installations between 2014 and 2016, other concepts like monopiles are also in use. Looking ahead, developments in floating wind turbines are expected to drive innovation, potentially leading to the deployment of floating substations by the early 2030s.
The European market is anticipated to witness the installation of eight new offshore substations in 2024 alone, marking a significant increase from previous years. Future installations beyond the 50-kilometer mark from shore are expected to further drive demand for offshore substations in the latter half of the decade.
