China overtakes Europe as world’s largest offshore wind provider


Howard Mustoe
Tue, 29 August 2023 

Key European projects like Vattenfall’s development off the Norfolk coast have ground to a halt amid rising costs - Vattenfall

Europe has lost its crown to China as the top builder of offshore wind power as UK developers battle higher costs and stagnant power prices.

The offshore wind market totalled 64.3 gigawatts of power globally last year, according to the Global Wind Energy Council (GWEC), with China contributing about 49pc of that compared with Europe’s 47pc share.

Big manufacturers in wind “have faced a profitability crunch over the last few years, causing them to retrench and selectively withdraw from smaller or slower-moving markets,” the report said.


In its annual global offshore wind report, GWEC said by the mid-2020s “there may be supply chain bottlenecks in every region of the world except China”.

Rebecca Williams, head of global offshore wind at the GWEC, said: “Immediate investment and global cooperation will be needed to address these bottlenecks.”

In Europe the rate of installations last year was the lowest since 2016. Europe’s total offshore wind capacity reached 30 GW last year, 46pc of which was from the UK.

While the UK still dominates European wind power at sea, Britain’s ambitions to be an exporter of clean wind power risk being scuppered as the rest of Europe catches up.

A surge in supply chain costs has pushed up the price of wind turbines, while increases in global interest rates have raised refinancing costs substantially.

In July, Swedish energy giant Vattenfall halted development of a major 1.4 gigawatt wind farm off the coast of Norfolk after soaring inflation made the project unviable.

Wind farms in the UK are largely governed by contracts for difference (CfDs), which are 15-year subsidy agreements between the Government and power generation companies, designed to guarantee energy schemes stable revenues.

The UK is in the middle of another round of bidding for the contracts. In the current allocation round, which finishes next month, offshore wind is competing with solar and onshore wind, which are both cheaper to build.

Boris Johnson set a goal of transforming Britain into the “Saudi Arabia of wind” while he was Prime Minister in 2020 and the UK has a target to build 50GW of offshore wind power by 2030, from current levels of around 14GW.

However, the GWEC’s report showed that the UK’s share of new offshore wind projects is projected to fall from almost half today to around a fifth in a decade’s time as Germany, Denmark, the Netherlands and France gear up construction of their own wind farms.

The lobby group warned that investors keen to meet their environmental targets need wind farm projects with permits and predictable earnings from willing customers.

Ms Williams added: “Offshore wind projects have been delayed or indefinitely stalled by inadequate and inefficient permitting and licensing rules. These factors have created uncertainty and have forced developers to review the viability of their projects, in some cases even to stop developing.

“Such ineffective policies centred on a downward price competition and, where coupled with impractical and unattainable local content stipulations, will add to project costs and slow the pace of offshore wind deployment needed for the world to meet net zero.”