The offshore wind sector stands poised for significant growth despite ongoing supply chain hurdles, according to a recent report by Shoreline Wind. The white paper outlines both the promising opportunities and critical challenges the industry faces as it strives to meet ambitious clean energy goals by 2030.
In 2023, global offshore wind capacity reached a record 10.8GW, bringing the total installed capacity to 75.2GW. The Global Wind Energy Council (GWEC) predicts that 140GW of new installations will be required between 2024 and 2028, necessitating a growth rate nearly three times the current pace.
“Offshore wind is uniquely positioned to play a significant role in driving the energy transition,” the report states, pointing to surging demand driven by the 2030 clean power targets.
However, the report also highlights several systemic challenges within the supply chain. Competitive tenders have historically led to what is described as a “race to the bottom,” forcing developers to accept lower strike prices while paying higher costs for development rights. For instance, UK strike prices fell from £150/MWh in 2014 to under £40/MWh by 2020, and in Germany, developers recently paid €12.6 billion for 7GW of development rights.
The report warns that these dynamics have contributed to project delays and, in some cases, failed tenders, such as a recent auction in Denmark. The resulting pressure on profit margins has curtailed investment in innovation and scaling, particularly for smaller supply chain companies, which struggle to compete against larger, lower-cost rivals.
“Offshore wind's global supply chain is facing critical systemic challenges,” said Ole-Erik Endrerud, founder and chief product officer of Shoreline Wind. “To achieve the 2030 targets, the industry needs to move beyond short-term cost-cutting and focus on building a resilient, innovative supply chain that can deliver consistently, and at scale.”
The white paper also calls on governments to provide clearer policy direction to ensure long-term investment security. Additionally, developers are urged to remove barriers for supply chain companies by adopting standardized contracts, improving payment terms, and providing greater predictability. These steps, the report suggests, would empower smaller firms to invest in innovation and efficiency.
As the sector prepares for its crucial role in the global energy transition, addressing these supply chain issues will be key to unlocking its full potential.
