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One factor is the ongoing uncertainty and instability in politics right now. The markets most challenged by this could struggle to advance policies and legislation that support offshore wind, or gathering enough political backing to advance the sector. This is a particular risk in countries such as Germany, where elections will take place this year.

Then there is the US, where President Donald Trump has expressed his intention to halt offshore wind. This has already introduced uncertainty, halting some deals, and the market is likely to cool.

Nevertheless, projects that have already secured offtake and the necessary permits, and thus have a clearer path to construction and operation, are better placed to progress. Consider, for example, the recent financial close of the Empire Wind 1 project in the US. Projects such as this are a potential showcase of what offshore wind can deliver, perhaps helping to change minds.  

The promise of last year’s offshore wind auctions only partly delivered, with some auctions uncontested or delayed. Business cases were impacted by inflation, high interest rates and the offtake deals – on the table or off.

The supply chain challenge has become not just socio-economic, but geopolitical, with suppliers in south-east Asia and China catching up with, and challenging, the pole position of incumbents in the western market.

What we have seen – and expect to continue seeing in 2025 – is developers being increasingly intentional and selective about their business during this downturn, prioritising offshore wind farms under construction, projects with a business case, markets they can win, and overall business consolidation.

Placing bets

But 2025 is not all doom and gloom; there is considerable agency that developers, suppliers, governments and other sector stakeholders have to make this year count. Reversing this downturn depends on offshore wind players placing the right bets, right now.

Talk about expected auctions and the pipeline under development this year can therefore be skated over. The volume is quite significant – dozens of gigawatts – and spread around the world. This is good, essential even, but not a guarantee that wind farms will be deployed and deliver the energy transition at the scale and pace that is needed or targeted by some countries.

The quest remains the same: to find attractive sites in markets where projects can mature to final investment decision (FID), be built, and produce power that can be integrated into the grid in reasonable time, at reasonable cost, with adequate returns and a net positive impact on society.

It will take work, constructive collaboration between stakeholders, and good decision-making to achieve this, particularly in the current landscape. But this is the only way to avoid or limit auctions with no bidders, previously awarded sites seeing limited progress, commissioned projects bringing limited socioeconomic benefit, and already operating wind farms being severely curtailed. These stories dampen the sector’s morale and momentum, despite being natural growing pains of what is now a much larger and active sector.

Green shoots for 2025

We entered the year with interest rates on a lowering trajectory, a trend that will be very helpful given cost of capital is a key driver of the levilised cost of electricity.

We also expect concrete additions to the supply chain, including up to nine new jack-up vessels becoming available, new monopile manufacturing facilities in the UK and Germany beginning operations, and several upgrades to offshore wind manufacturing facilities in Europe and south-east Asia increasing supply chain delivery capacity. 

Now we need to get more projects to FID to ensure this additional capacity does not sit idle and the investments pay off.

Further offshore wind site auctions are expected, or have taken place, in the UK or Poland, where projects have the option of securing government-backed long-term CfD agreements. These agreements bolster the business case for wind when set at the right level, as seen recently in the UK, with allocation round six (AR6) last year adjusted to achieve a better outcome, which is also expected for AR7 this year.

Pragmatism

To bring back momentum to the sector, leadership will need to understand and address what prevents moving offshore wind forward and what drives positive decision-making.

Developers, suppliers, industry bodies, governmental agencies and governments need to focus on where things can move on and how to improve the story about the rewards of offshore wind – the business case, the socioeconomic benefits and the decarbonisation contributions.

Bringing costs down will depend on inflation and interest rates, but also on how much progress is achieved in industrialising offshore wind manufacturing, optimising engineering designs and the logistical operations of more challenging projects.

Permitting and grid connection need to be addressed strategically and with urgency by authorities and developers to reduce the time taken for approvals. Grid integration and reinforcement requirements cannot be treated as a later stage consideration and must be looked at early when planning new leases.

Strategic partnerships and consolidations between developers, as well as between suppliers, strengthen the ability of sector players to invest in resources and their activities, as well as to navigate the downturn.

Offshore wind is still a global story in 2025, because of its proven track record, its global potential and the gigawatts available.

However, it is at the local level that the most impactful contributions to the sector can be made: new investments and the latest windfarms becoming success stories that can set an example or case study.

Will there be a turning of the tide? We shall see.

Elson Martins is chief consultant, offshore wind at Ramboll