Wind Power’s Lost Year May Be Setting Up a Reset in 2026

By Alex Kimani - Dec 29, 2025

• 2025 was a difficult year for clean energy, with major U.S. tax rollbacks and weak European auctions leading to widespread cancellations of solar, wind, and storage projects.
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• Policy adjustments are now improving the outlook for wind in 2026, as Europe raises auction price caps, reforms tender designs, accelerates permitting, and shifts toward more stable revenue models

2025 has proven to be an annus horribilis for clean energy after Trump’s One Big Beautiful Bill Act (OBBBA) rolled back major tax credits and imposed new restrictions, pressuring early-stage solar and wind energy pipelines. Indeed, a Cleanview analysis of U.S. power projects has revealed that developers have cancelled 1,891 power projects with a combined 266 GW of generation capacity in the current year, including 86,466 MW of solar power, 79,045 MW of storage and 54,328 MW of wind power projects. Meanwhile, Europe has witnessed disappointing auctions for new wind power capacity across the continent, highlighting that the industry's woes extend beyond U.S. shores. But the experts are now saying the worst could be in the rear-view mirror, with the global wind energy industry poised for an improved outlook in 2026, driven by strong demand, technological advancements and more supportive policy frameworks. Global wind power generation is set to accelerate, with renewables expected to overtake coal as the largest source of electricity globally by 2026.

In response to project cancellations and auction failures in 2024-2025, policymakers in Europe are adapting wind energy strategies through a variety of measures, most notably by increasing auction price caps and reforming auction designs to manage market risks. Other key adaptations include accelerated permitting processes, new financial incentives and a shift away from "negative bidding".

To wit, the UK government, raised the maximum strike prices for its Allocation Round 6 (AR6) Contracts for Difference (CfD) scheme in 2024 to reflect soaring supply chain costs and high interest rates. This adjustment made projects more financially viable and resulted in a more successful AR6 auction compared to the failed AR5 in 2023, which received no bids for offshore wind. Similarly, Germany and Denmark are moving away from auction designs that required developers to pay for the right to build projects (negative bidding), a practice that deterred investment, instead transitioning towards a greater use of Contracts for Difference (CfDs) which offer more stable and predictable revenue streams for developers.

Some policy makers are adjusting the allocation of risk between developers and the government. For example, in the Netherlands, rules for certain tenders were eased, reducing the required investment per site and limiting developer liability during the initial years of the permit.

A major focus is on strategic grid development to integrate the growing capacity of wind energy efficiently. Initiatives like the UK's Offshore Transmission Network Review (OTNR) and the EU's TEN-E Regulation promote coordinated, "networked" systems to reduce costs and environmental disruption. Policymakers are also focusing on accelerating the often-lengthy and bureaucratic permitting process. The EU's Renewable Energy Directive III introduced "go-to areas" with pre-assessed environmental impacts to cap permitting times for new projects at 12 months. Likewise, the UK's Offshore Wind Environmental Package is designed to cut average permitting time by 40% through better data sharing and coordinated assessments.

On the technological front, continued advancements are driving down costs and improving efficiency.  Development of advanced blade designs and larger turbines (e.g., above 15 MW class) is increasing energy capture and lowering the levelized cost of energy (LCOE). Larger turbines utilize massive rotors and longer blades to sweep a significantly greater area. This allows them to capture more wind energy at higher altitudes where winds are often stronger and more consistent, directly boosting electricity generation. Advanced blade designs incorporate sophisticated aerodynamic profiles and materials that optimize how the blades interact with the wind, maximizing the efficiency of energy conversion. Meanwhile, the integration of AI and data analytics in wind farm operations is enabling predictive maintenance, optimized performance, and integration into real-time energy markets, reducing operational costs and unplanned downtime.

Capital has not left the sector, but it has become more selective. 

Publicly traded wind-focused equities have rebounded in 2025 after a weak prior year, supported by rising electricity demand from data centers, electrification, and tighter power markets rather than by subsidy expansion alone. As of mid-year, wind-linked funds such as the First Trust Global Wind Energy ETF have outperformed broader equity benchmarks, reflecting expectations that project economics improve as auction terms reset and supply-chain pressures ease. 

At the same time, investors remain cautious, with balance-sheet strength, grid access, and contract structure increasingly determining which developers can move projects forward. Cost competitiveness remains a core support: multiple independent analyses show that new onshore wind capacity is among the lowest-cost sources of new electricity generation in many regions, often competing directly with new gas-fired power even without direct subsidies.

The recovery narrative is uneven, particularly in the United States. 

While technology and power-market fundamentals are improving, U.S. offshore wind continues to face policy uncertainty beyond subsidies and auctions. Washington has paused certain offshore wind leasing and reviews on national security grounds, introducing new risk that has nothing to do with project economics.

By Alex Kimani for Oilprice.com