Offshore Wind Energy in Europe: Record Growth and Investments in 2023, with Ambitious Plans for the Future

According to WindEurope, 2023 stood out as a pivotal year for the development of offshore wind energy in Europe, with significant growth in new installations both within the European Union and across the continent.

In numerical terms, 4.2 GW of new offshore wind capacity was built, with 3 GW attributed to the EU, marking a notable increase compared to the 1.7 GW installed in 2022.

Wind Energy: Key Players in the Netherlands, France, and the UK

In this context, the Netherlands, France, and the United Kingdom played key roles, with notable installations like the "Hollandse Kust Zuid" project in the Netherlands, which at 1.5 GW has become the world's largest operational wind farm.

Alongside these developments, the sector saw an exponential increase in investments, reaching a record €30 billion, allocated to finance eight new wind farms that will add 9 GW of capacity.

This represents a significant turnaround from the historic low of €0.4 billion recorded in 2022, a decline attributed to legislative uncertainties and poorly calibrated market interventions.

The political landscape of 2023 offered further reasons for optimism for the sector. The EU adopted the Wind Energy Package, consisting of 15 immediate actions to support the wind industry, and 26 European governments signed the European Wind Charter, committing to rapidly implement the planned actions.

In the UK, government policies included raising the maximum price for offshore auctions, as highlighted by Orsted's 2.9 GW Hornsea 3 project and RWE's acquisition of the 4.2 GW Norfolk offshore wind portfolio.

Offshore Wind: Poland Develops the 1.2 GW Baltic Power Project

Looking ahead to 2024, it is expected to be an even more significant year, with estimates indicating the auction of at least 40 GW of capacity. Germany, Denmark, the UK, France, and the Netherlands are at the forefront of this process.

However, the auction system has shown some shortcomings, particularly with the use of unlimited negative bids, which have raised concerns about additional risks and costs for both developers and consumers.

In parallel, Poland made its debut in the offshore wind sector with the 1.2 GW Baltic Power project, marking the start of its development plan to reach 18 GW by 2040.

Despite this, Europe faces a critical challenge: increasing the capacity of the offshore wind supply chain. Currently, it can produce only 7 GW per year, an insufficient figure to meet Europe's ambitious climate and energy security targets.

Therefore, it is essential to invest in new manufacturing plants, as well as in support infrastructure such as grids, ports, and ships. An encouraging sign in this regard comes from European offshore electric cable manufacturers and other sector companies, who are already expanding their production capacities to meet growing demand.