Europe to add 4.5 GW of offshore wind in 2025: Record investment and supply chain challenges

In 2024, Europe installed 2.6 GW of new offshore wind capacity, with key projects in the United Kingdom, Germany, and France.

However, the sector's expansion faces major challenges, including limited infrastructure, rising costs, and regulatory hurdles, which could slow the expected growth.

This is analysed on the "Offshore Wind in Europe: 2024 Trends & Statistics" webinar, organised by WindEurope, and complemented by insights from Strategic Energy, highlighting Europe's efforts to reach 20 GW of new offshore wind capacity in 2025.

Europe reached 37 GW of installed offshore wind capacity in 2024, including 21 GW within the EU.

However, this growth fell short of the initial 3.8 GW forecast, due to infrastructure delays and supply chain issues.

According to Alexandre Fremaux, analyst at WindEurope, the sector is progressing, but installation rates need to increase beyond 10 GW per year to meet 2030 climate targets.

SInstallation volumes are rising, but there is still uncertainty in long-term planning," Fremaux noted.

The European strategy aims to significantly expand capacity in 2025, targeting at least 4.5 GW of new offshore wind.

Countries such as the United Kingdom, Germany, the Netherlands, and France are leading the expansion, while emerging markets like Spain, Italy, and Portugal are pushing forward their first tenders.

The offshore wind sector received 18.6 billion euros in investment in 2024, surpassing expectations thanks to the consolidation of key projects in Germany, the Netherlands, and Poland.

Mattia Cecchinato, Offshore Wind Manager at WindEurope, highlighted the surge in tenders: S2024 was a record year with 19 GW awarded, including 12 GW in negative bidding auctions in Germany and the Netherlands.

• Germany awarded 8 GW across two rounds, but with fewer participants than previous tenders.
• The UK reinstated the Contract for Difference (CfD) mechanism, boosting the allocation of 5 GW.
• Norway launched its first offshore wind tender, awarding 1.5 GW of capacity.

The Strategic Energy report emphasises that the European Union is strengthening its financial strategy, prioritising grants and incentives to accelerate private investment and meet capacity targets.

The expansion of offshore wind has increased demand for port infrastructure, components, and specialised vessels.

According to Lizet Ramirez, Senior Analyst at WindEurope, the lack of capacity in ports and manufacturing facilities is a major concern:SOver the next five years, we need to expand manufacturing capacity to meet installation targets.

Currently, 50 factories across Europe are expanding operations with 11 billion euros in investments, mainly in turbines, foundations, and cables.

However, bottlenecks in logistics and port capacity could delay future installations.

WindEurope warns that rising manufacturing and transport costs could further slow the rollout of new projects.

Without greater support for the supply chain, Europe may struggle to meet its 2025 offshore wind targets.

Regulatory frameworks are critical to offshore wind's future.

In 2024, the EU implemented the Net Zero Industry Act, aimed at boosting local manufacturing and ensuring stability in renewable energy tenders.

However, policy uncertainty persists:

• Denmark cancelled a 3 GW tender due to a lack of demand.
• Sweden suspended 32 GW of offshore wind projects over national security concerns.
• Spain and Portugal announced their first floating offshore wind tenders for 2025, offering more flexible conditions.

Mattia Cecchinato stressed the importance of clear regulations:SThe sector needs stable and consistent policies to secure long-term investments.

The sector says that regulatory fragmentation across EU countries raises project costs and complicates long-term planning.

Despite challenges, 2025 is set to be a pivotal year for European offshore wind.

Between 35 and 50 GW in new tenders are expected, with emerging markets such as Spain, Italy, and Portugal launching their first auctions.

The 20 GW capacity target for 2025 is a crucial step towards 300 GW of offshore wind by 2050, as outlined in Europe's energy transition strategy.

However, achieving these figures depends on stable policies and increased infrastructure investment.

Clara Castelli, Press & Communications Officer at WindEurope, concluded:SEurope"s energy transition requires regulatory stability and a robust supply chain to meet the 2030 and 2050 climate goals.

Offshore wind in Europe is expanding rapidly, with record investments and strong growth.

However, infrastructure limitations, regulatory hurdles, and volatile tenders pose risks to future development.

While the 20 GW target for 2025 is ambitious, supply chain bottlenecks and policy uncertainty could delay progress.

With a clear roadmap and a stable market environment, the EU has the potential to consolidate its leadership in offshore wind. 2025 will be a defining year for the sector"s future.