Offshore Wind 2024: Reflections from the Helm (Part 2)

As 2024 comes to a close, it is time to take stock of where the offshore wind industry stands—and to look ahead to what 2025 may bring.

The year has been marked by progress and challenges, shaped by technological advancements, cautious market sentiment, and shifting global policies. While optimism remains, it is tempered by the realities of scaling, geopolitical tensions, and economic uncertainty.

Scaling Up: The Technology Race

Technological advancements continue to redefine offshore wind’s trajectory. In 2024, we witnessed the next stage in the turbine scale race, with Chinese manufacturers fielding prototypes in the 18–20 MW range. Their rapid development reflects an ambition to capture global market share, competing with European OEMs like Vestas and Siemens Gamesa, who have held steady with their 14–15 MW platforms.

These larger turbines, while critical for lowering the levelised cost of energy (LCOE), bring new challenges. Rapid scaling strains supply chains, port infrastructure, and the availability of installation vessels. The question remains whether bigger always equates to better, or whether incremental innovation at established scales offers a more sustainable path forward.

The role of Chinese wind turbine generators (WTGs) in international markets also warrants careful consideration. While cost advantages are driving interest, challenges around transport, installation, and aftersales support remain significant barriers. For European markets in particular, geopolitical dynamics and quality perceptions continue to influence adoption.

Floating Wind: Promise and Pragmatism

Floating wind technology has been a focal point for innovation and policy discussion in 2024. Commitments from COP29 highlighted its role in future climate strategies, but large-scale deployment remains several years away. Cost competitiveness and supply chain readiness remain hurdles, as does infrastructure development for deep-water projects.

While 2024 demonstrated incremental progress, the widely anticipated “hockey stick” deployment of floating wind has shifted further into the future. Nonetheless, with continued investment, collaboration, and pragmatic policymaking, floating wind remains a critical solution for unlocking renewable energy potential in deeper waters.

A Conservative Outlook for 2025

Caution defined much of 2024, and this sentiment is likely to persist as we enter 2025. Developers and investors have adopted a measured approach, prioritising certainty and risk mitigation. This shift is both experimental and necessary.

Several key factors will influence the year ahead:

• Economic Trends: Stabilising interest rates, forecasted for mid-2025, may ease financing pressures. However, political and economic shifts in key markets could complicate this outlook.
• Policy and Auctions: European markets have continued to move toward more balanced support mechanisms, recognising that ultra-low auction bids are no longer viable for sustainable growth. The UK’s adjusted approach to Contracts for Difference (CfDs) reflects this maturity.
• Geopolitical Risks: The integration of Chinese WTGs into global supply chains raises both opportunities and challenges, shaped by cost pressures and regional policies.

The Road Ahead: Key Questions for the Sector

Looking ahead to 2025, the offshore wind industry must confront several critical questions:

1. How will U.S. policy evolve under shifting political dynamics?
2. Can Chinese WTGs achieve broader acceptance in international markets?
3. How quickly can floating wind achieve cost parity and scale sustainably?
4. What role will policy play in driving long-term stability?

The answers to these questions will shape the sector’s ability to navigate challenges and seize opportunities in the years ahead.

Conclusion: Resilience in the Face of Change

2024 has been a year of recalibration and reflection. The sector has faced economic headwinds, geopolitical uncertainties, and technological challenges, yet it remains resilient. Offshore wind continues to evolve—its importance to global energy transitions is undeniable.

As we look to 2025, the focus must be on balancing ambition with realism. Industry players must continue to innovate, collaborate, and adapt to a complex and changing landscape. The resilience demonstrated in 2024 provides a foundation for progress as we move forward.

The winds offshore remain strong—today, tomorrow, and for decades to come. Offshore wind remains central to the energy transition, and as an industry, we have much to be proud of.

As we close out the year, I want to recognise the remarkable achievements of my colleagues at OWC, the wider ABL Group, and across the industry. Together, we have weathered challenges and laid the groundwork for a more sustainable future.

Let us take this time to recharge and return with renewed focus. Offshore wind’s best days are still ahead of us.

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OWC – The Renewable Energy Consultants – is an ABL Group company dedicated to ensuring project success.

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