New research highlights a troubling trend in the floating offshore wind industry, revealing a marked decline in confidence among developers, which is contributing to weakened growth forecasts for this essential segment of renewable energy. The findings, released by Westwood Global Energy Group, underscore the shift in sentiment among key industry stakeholders—from optimism to caution—as they reassess the various challenges facing the sector.
According to the annual Floating Offshore Wind Survey, which gathered insights from 166 participants across the global floating wind value chain—including engineers, developers, investors, and government bodies—confidence has decreased significantly compared to last year. While earlier reports indicated a surge of activity due to new leasing rounds and favourable subsidy announcements, the latest data reflects increasing unease regarding delivery timelines, investment risks, and slow-moving policy initiatives. A troubling 63% of developers now express less confidence about the market’s future, with most respondents indicating a revision of their growth expectations over both the short and long term.
The survey further reveals a stark prediction: 72% of participants anticipate that global operational capacity for floating offshore wind will fall short of 3 gigawatts (GW) by 2030. This figure starkly contrasts earlier forecasts which had skewed toward a more ambitious outlook, underscoring the sector's current predicament.
One of the primary challenges cited relates to financial viability. Participants highlighted the steep upfront capital costs associated with floating wind projects as a significant barrier, compounded by a lack of investor confidence in these emerging technologies. Insufficient port infrastructure, a lack of standardised technology, and limited governmental support further exacerbate the situation, making it increasingly difficult for developers to progress.
This downturn in confidence occurs within a broader context where governments and the private sector are placing renewed emphasis on the importance of renewables in achieving climate objectives. For the floating offshore wind industry to realise its full potential, experts assert that immediate action is required to address infrastructure shortfalls and instil greater confidence in policy frameworks.
Highlighting the industry's urgency, Bahzad Ayoub, an offshore wind manager at Westwood, notes that while progress is indeed taking place, it is not keeping pace with expectations. He emphasised that the industry must begin to treat floating wind as a distinct sector, rather than a mere extension of fixed-bottom wind technology. “Optimism hasn’t disappeared, but it’s now paired with a grounded mindset,” he remarked, reinforcing the need for a tailored approach that acknowledges the unique technology, timelines, and investment requirements inherent in floating wind.
In related developments, external dynamics continue to shape the landscape of offshore wind projects globally. For instance, the recent lifting of a halt on Equinor’s $5 billion Empire Wind project off the coast of New York was hailed as a significant victory by industry leaders, with Equinor's CEO emphasising its potential for job creation and critical infrastructure development. This decision followed a period of uncertainty where previous political changes had cast a shadow over the industry's future, resulting in other major companies reconsidering their commitments.
Meanwhile, in Europe, various governments are recalibrating their offshore wind strategies to stimulate interest and investment. The Dutch government’s postponement of tenders due to lukewarm developer interest highlights the need for more attractive subsidy models. Concurrently, Denmark has announced new tenders for offshore wind capacity, indicating a proactive stance amid rising costs and limited investor enthusiasm.
In a promising development for floating wind technology, Norway has recently launched its inaugural floating offshore wind tender at the Utsira Nord site, aiming to provide up to 500 megawatts of capacity. This initiative marks a crucial step forward in deploying floating wind projects, highlighting Norway's commitment to advancing this vital technological advancement despite prevailing industry challenges.
As the floating offshore wind sector finds itself at a crossroads, the collective efforts of industry stakeholders and government bodies will be pivotal in navigating the array of challenges presented. Tesearch suggests cautious optimism may be warranted, but only if the necessary infrastructural and regulatory conditions are met.
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Source: Noah Wire Services