Five things to watch in offshore wind in 2025

In any case, a further complication is many of the largest turbine models being developed are from Chinese manufacturers, whose approach to financing, warranties and O&M is largely untested in the European offshore market. Given past precedent, it seems likely the largest available turbines will remain most attractive to developers, so long as they have confidence in the security of their supply and the necessary installation vessels and facilities. There are, after all, perhaps five to 10 wind turbine installation vessels in operation or on order capable of installing ~20 MW turbines, assuming 20-MW turbines feature a hub height of ~165 m.

The third theme that will continue to play out in 2025 is the continued evolution of the floating wind market. 2024 was a relatively positive year for floating wind, with several large projects across France, the UK and South Korea securing the subsidies which should enable them to reach FID in due course. With more significant floating tenders set to conclude in 2025 – including the Celtic Sea in the UK and Utsira Nord in Norway – and more details potentially emerging about 2024’s winners, could 2025 be the year the floating supply chain starts to take shape? 

While an upsurge in optimism may be premature, we should start to get a greater sense of what the industry may look like in future, assuming the supply chain is ready to start offering commercial volumes. As recent years have amply demonstrated, the proof of the project is in putting steel in the water. Even fully consented and funded projects can be derailed by changing economic and political conditions.

The fourth theme is government support for offshore wind and whether it will support lofty ambitions for future offshore wind capacity. Many governments have big plans for offshore wind, but the financial and policy support they make available has not always been the equal of this ambition. This has led to some high-profile setbacks in recent years, with offshore wind offerings in the UK, Denmark, Estonia, Lithuania, the US and Japan all failing to generate the expected level of interest – and in some cases, any interest at all.

The better news is that, excluding the highly unusual situation in the US, governments have generally responded to these setbacks with supportive policy reforms. While developers are unlikely to get everything they want from government in the coming year, recent reforms may constitute a sufficiently critical mass of change for regulation to become less of an impediment in 2025. 

Moreover, several lease and subsidy auctions are likely to conclude in new markets in the coming year, such as India and the Philippines, which should give us a sense of how successful governments in these countries have been at creating regulatory regimes that stimulate bidder interest.

Last but by no means least, is what role oil and gas companies will play in the in offshore wind market. Oil and gas operators entered the offshore wind sector in the early 2020s, with much fanfare and at great expense, before retreating in the face of unimpressive returns and discontented investors. 

E&P players alone were responsible for 4.3 GW of net project divestments in 2024. So far, the general strategy among E&P companies seems to have been one of ‘hive off and hibernate,’ with operators selling off their holdings or moving them into JVs, and aggressively limiting short-term capital spend on offshore wind or sharing it with JV partners. The most significant role for oil and gas companies in offshore wind in 2025, then, may be one of conspicuous absence. This would be a partial reset for the sector, returning it to something like a pre-2020 state, where established renewables developers represented the industry’s largest players. 

Riviera’s Offshore Wind Journal Conference will be held in London, 3 February 2025. Click here to register for this industry-leading event.