Europe was supposed to install 120 gigawatts of offshore wind by 2030. It will have at best 70. In three years, the sector that presented itself as proof that renewables could compete with gas without public aid has accumulated failed auctions, frozen projects, and spectacular withdrawals. TotalEnergies wants to return 7 gigawatts of development rights won in Germany in 2023. The Netherlands, Denmark, Lithuania, and France have all seen calls for tender end without bidders.

The zero-subsidy model was a promise from the pre-2022 world. It only held up in an environment of near-zero interest rates, stable supply chains, and contained inflation. These three conditions have all disappeared together. What remains is a capacity deficit that threatens European climate objectives and forces a complete rethinking of how Europe remunerates its investments in clean energy.

The Essentials

  • Nine countries bordering the North Sea committed to 120 GW of offshore wind by 2030 (Ostend Declaration); WindEurope revises the forecast to 70 GW at best, a considerable shortfall against the target.
  • TotalEnergies announced its intention to return 7 GW of offshore development rights in Germany, due to lack of economic viability under current conditions.
  • Auctions have failed in at least five European countries: Germany, France, the Netherlands, Denmark, Lithuania.
  • The European Commission proposes a tripartite contract mechanism to restore project bankability, but modalities remain to be clarified.
  • The sector maintains real industrial capacity: 18 GW were installed in Europe in 2023-2024, and several projects remain under active construction.

The Zero-Subsidy Promise Was a Calendar Error

In 2022, Ørsted won Dutch offshore licenses at zero subsidy. Vattenfall obtained development rights for Hornsea 3 in the United Kingdom under the same conditions. The sector communicated production costs below 50 euros per megawatt-hour. Bloomberg NEF analysts projected continuous decline, driven by the scale effect of 14 to 20 MW turbines, by the maturation of installation techniques, and by historically low financing costs.

This scenario had a hidden fragility: it was entirely dependent on the cost of capital. An offshore wind project is 80 to 90% capital invested before the first blade rotation. When benchmark rates move from 0% to 4%, the cost of capital on these projects mechanically increases by several euros per megawatt-hour. Inflation in raw materials — steel, copper, composites — adds 20 to 30% to equipment costs between 2021 and 2023, according to Wood Mackenzie data. Logistics costs and specialized labor follow the same trajectory.

Result: projects won at fixed purchase prices of 45 to 55 euros per megawatt-hour no longer cover development costs. Ørsted cancelled its Hornsea 4 projects in the United Kingdom and Ocean Wind in the United States. Vattenfall ceded its Norfolk assets. BP and Equinor requested renegotiation of their contracts for New York projects. The problem is global, but Europe offers the most documented version of it.

Five Countries, Dozens of Gigawatts, and Nobody at the Window

Germany organized offshore auctions in 2023 for 7 GW. Calls for tender were won — including 3 GW by TotalEnergies. Two years later, TotalEnergies informs Berlin of its intention to return these rights. The reason is explicit in the company’s statements: the expected return on investment does not justify capital commitment under current market conditions.

In France, the AO6 call for tender for the Mediterranean nevertheless found two winners in December 2024: Ocean Winds (ENGIE/EDPR) for the Narbonnaise zone and Éoliennes Méditerranée Grand Large (EDF Renouvelables/Maple Power) for the Gulf of Fos, each for a 250 MW park. In the Netherlands, several lots of the Dutch call for tender were declared unsuccessful. In Denmark — a founding country of offshore wind, where Ørsted was born — projects were suspended due to lack of economic balance. In Lithuania, while the first 2023 call for tender did result in two bids (the legal minimum), won by Ignitis/Ocean Winds, it is the second call for tender (2024-2025) that failed due to insufficient bidders.

This is not a series of national coincidences. It is the same mechanism at play everywhere: the purchase prices set in auctions, or the market conditions at the time, no longer cover the costs of a sector whose charges have increased 15 to 25% depending on line items, without long-term electricity prices following suit. WindEurope quantifies the gap between 2030 targets and actual trajectory at 50 GW — equivalent to Spain’s total installed capacity in renewable electricity.

The European Commission did not remain without response. Brussels is working on a tripartite contract mechanism — State, developer, transport network — that would allow better risk-sharing between public and private actors. The idea is to move away from the model of pure auction at fixed price, which exposes the developer entirely to cost variations over ten years of construction, toward indexed contracts or volume guarantees. Several member states are in parallel considering guaranteed price floors or tariff revision mechanisms in case of inflation shock.

70 GW Instead of 120: What Europe Loses Concretely

The nine countries bordering the North Sea had committed to 120 GW by 2030 in the Ostend Declaration, an objective that was not merely symbolic. It corresponded to approximately 500 terawatt-hours of annual production, enough to cover 14% of current European electricity consumption, power several tens of millions of households, and contribute significantly to the objectives of exiting Russian gas defined after 2022. A 50 GW gap represents approximately 200 TWh of lost production — equivalent to 20 nuclear reactors in operation, or six times annual French onshore wind production.

For the European energy transition, the issue goes beyond simple megawatt counting. Offshore wind was supposed to be the backbone of electricity sector decarbonization in the 2030s. The North Sea, the Baltic, and the Mediterranean concentrate wind resources among the continent’s best. Offshore projects enable capacity factors of 45 to 55%, versus 25 to 30% for onshore wind. Each gigawatt of offshore produces substantially more electricity than a gigawatt onshore.

This gap also has an industrial dimension. Europe has built a sector — Vestas, Siemens Gamesa, Ørsted, TotalEnergies Renewables, Jan De Nul, Subsea 7 — that depends on a continuous flow of projects to maintain its expertise and amortize its investments in installation vessels, tower factories, and specialized ports. Siemens Gamesa has announced major restructurings since 2022, partially linked to the slowdown in orders. The risk is not only missing a climate target; it is losing an industry that Europe spent twenty years building.

What Siemens Gamesa and Vestas Say About Their Margins

Turbine manufacturers are the most direct indicators of the crisis. Siemens Gamesa posted cumulative losses exceeding 4 billion euros between 2022 and 2024, partly linked to rotor defects on certain models, but also to contracts signed before 2022 at prices that no longer covered manufacturing costs at delivery. Vestas reduced its margin forecasts for several quarters in a row before stabilizing the situation in 2024.

This is not a technology crisis. 15 MW turbines work. Hornsea 2, with its 165 Siemens Gamesa turbines, reached its full capacity of 1.4 GW in 2023 and produces electricity at a competitive cost. The problem is that of the business model in a transformed macroeconomic context. An offshore turbine costs approximately 2 to 3 million euros per megawatt installed. For a 1 GW park, total investment often exceeds 3 billion euros, accounting for subsea cables, foundations, electrical substations, and installation. At 4% interest, debt service on these 3 billion euros represents 5 to 8 euros per megawatt-hour additional versus zero-rate environment. This is often the difference between a bankable project and an abandoned one.

The decline in offshore wind costs over the 2010-2020 decade is real and documented. It halved the cost in ten years. But it was not an automatic and irreversible process. It resulted from a chain of favorable conditions — cheap financing, accelerated industrial learning, efficient global supply chains, low inflation — that were progressively disrupted: first supply chains in 2020-2021 with the Covid crisis, then raw materials inflation in 2021-2022, and finally the rise in benchmark rates from 2022 onward, with the ECB raising rates by 4.5 percentage points between 2022 and 2023. The impact on offshore wind peaked between 2022 and 2023. The question is not whether offshore wind will become competitive again. It probably will over ten years. The question is whether the sector and climate objectives can afford to wait.

What the Commission Can Do, and What It Cannot

The institutional response exists. Brussels has acknowledged the problem in its Net-Zero Industry Act and in discussions on electricity market reform. The idea of tripartite contracts is on the table: instead of a pure auction where the developer alone assumes risk over fifteen years, the State or network operator co-signs a commitment that reduces financing risk and therefore capital cost.

The United Kingdom has already adapted its Contracts for Difference system by raising reference prices. The first post-crisis adapted round attracted bids that previous rounds did not find. This is not a total victory — guaranteed prices are higher than five years ago — but it proves that a well-calibrated mechanism can unlock projects. France is examining a similar reform of its call for tender framework.

The Commission can also facilitate coordination of transport networks. One of the hidden costs of offshore wind is onshore connection. An offshore North Sea park must be connected to the continental grid through expensive high-voltage cables, whose financing and ownership vary by country. The initiative of offshore hubs in the North Sea — zones where multiple parks share a common connection — can reduce these costs by 20 to 30%, according to estimates from ACER, the Agency for the Cooperation of Energy Regulators.

What Brussels cannot do is decide on behalf of financial markets that these projects are safe. The return of institutional investors to offshore wind depends on the clarity of national contract regimes, the stability of tariffs over twenty years, and confidence that governments will not renegotiate terms in case of falling market prices. This confidence has partially eroded over the past three years — a few States have indeed attempted to revise contracts upward for developers, but persistent regulatory uncertainty feeds financier distrust.

The question of the European carbon tax, which weighs on production costs without necessarily increasing offshore wind revenues in all market configurations, adds to this complex equation — as we analyzed regarding its effects on less advanced economies.

Projects Moving Forward Prove the Problem Is Not Technological

The slowdown is real. The stop is not. In the North Sea, the Dogger Bank park, the future world’s largest offshore park at 3.6 GW, continues its construction. Borkum Riffgrund 3 from Ørsted advances in Germany. Several Scandinavian and British projects progress in their permitting and financing phases. In 2023 and 2024, approximately 18 GW were installed in Europe according to WindEurope, a significant volume even if it remains below the pace necessary to reach targets set for 2030.

Floating offshore wind also opens a new frontier. Current technologies are limited to seabeds less than 60 meters deep, which excludes deep Mediterranean, the Atlantic, and coastal zones of Portugal or Norway. Floating wind, still in large-scale demonstration phase, could in the 2030s multiply accessible zones tenfold. Pilot projects advance in Scotland, Norway, and France. Cost remains high — two to three times that of fixed offshore wind — but the learning curve resembles what the industry experienced in the 2010s for fixed foundations.

The real signal to watch is not the number of failed 2024 auctions. It is the quality of support mechanisms that member states will put in place by 2026, and the Commission’s capacity to coordinate a response that transcends national patches. If tripartite contracts progress, if British reference prices set an example, if North Sea network hubs materialize, the trajectory of 80 to 90 GW by 2030 remains achievable — not the 120 of North Sea countries, but enough to maintain the sector and lay the foundations for a much more ambitious 2030s decade.

Offshore wind has not failed. It has met, for the first time at large scale, real economics.

Sources

  1. WindEurope — Offshore Wind in Europe in Peril: https://windeurope.org/news/offshore-wind-in-europe-in-peril/
  2. Brussels Times — reporting on European offshore auctions and TotalEnergies decision (uses WindEurope data)
  3. Wood Mackenzie — offshore wind cost analyses 2021-2024 (sectoral reports, no stable URL)
  4. ACER — Agency for the Cooperation of Energy Regulators, estimates on North Sea network hubs (annual market reports)
  5. Siemens Gamesa — annual financial reports 2022-2024 (siemensgamesa.com)
  6. Ørsted — annual reports and project communications 2022-2024 (orsted.com)
  7. UK Department for Energy Security and Net Zero — Contracts for Difference AR6 results, 2024
  8. Ostend Declaration — 120 GW North Sea Objective: https://www.enerdata.net/publications/daily-energy-news/nine-north-sea-countries-aim-develop-300-gw-offshore-wind-2050.html
  9. WindEurope — 2030 offshore forecast: 73 GW Europe: https://www.energy-omni.com/en/product/detail/EOP031?categoryId=431Zh67rp5rN5GQd
  10. Bundesnetzagentur — German offshore auction July 2023 (7 GW): https://www.bundesnetzagentur.de/SharedDocs/Pressemitteilungen/EN/2023/20230712_OffshoreResults.html
  11. Ørsted — Hornsea 4 Cancellation (May 2025): https://orsted.com/en/company-announcement-list/2025/05/orsted-to-discontinue-the-hornsea-4-offshore-wind–143901911
  12. Ørsted — Ocean Wind Cancellation (October 2023): https://orsted.com/en/company-announcement-list/2023/10/oersted-ceases-development-of-its-us-offshore-wind-73751
  13. European Commission — Tripartite Contracts (September 2025): https://energy.ec.europa.eu/news/commissioner-jorgensen-announces-first-2-sectorial-tripartite-contracts-2025-09-05_en
  14. French Ministry — AO6 Mediterranean Winners (December 2024): https://presse.economie.gouv.fr/construction-et-lexploitation-de-deux-parcs-eoliens-en-mer-flottants-les-deux-laureats-de-lappel-doffres-designes/
  15. UK Government — CfD AR6 results and AR7 prices: https://www.gov.uk/government/publications/contracts-for-difference-and-capacity-market-scheme-update-2025/contracts-for-difference-and-capacity-market-scheme-update-2025-accessible-webpage
  16. Clean Energy Wire — TotalEnergies Germany (May 2026): https://www.cleanenergywire.org/news/major-offshore-wind-projects-germany-stake-companies-seek-opt-out-media-report
  17. WindEurope — Failed tenders Germany, France, Netherlands, Denmark, Lithuania: https://windeurope.org/news/offshore-wind-in-europe-in-peril/