Analysts rethink floating wind forecasts as growing pains multiply

Years of slow progress in the floating wind industry are being dragged out by the broader challenging investment environment for offshore wind, potentially delaying the rollout of a technology deemed essential to unlocking deeper areas of the seabed.

Market analysts are lowering their global installation forecasts for floating wind due to limited policy support and a lack of project investment decisions.

Ongoing difficulties around cost inflation and supply chain disruption — major problems for wind developers globally — are also clouding the outlook and casting uncertainty on the emergence this decade of commercial-scale floating projects.

The Global Wind Energy Council now anticipates 10.9 GW of floating wind capacity by 2030, 42% lower than the projection it made in 2022. Meanwhile, analysts at S&P Global Commodity Insights have pushed half of their previous 12-GW forecast for 2030 out further, with only about 6 GW now expected online this decade.

With just 227 MW of floating turbines installed globally today, even 3 GW to 5 GW by 2030 "seems overly optimistic and with low probability of being achieved," said Adrian Bucica, senior adviser at offshore wind consultancy Green Ducklings, pointing to uncertainties in the global project pipeline.

"There is no clarity yet on which projects could achieve [final investment decisions, or FIDs] in the next 2-3 years and without FIDs by 2026-2027 we cannot expect sizable installations before 2030," Bucica said in an email.

The downgraded outlook deals a blow to an industry that is seen as critical in opening up areas of the seabed that are too deep for fixed-bottom foundations.

But it also comes at a tumultuous time for offshore wind more broadly, with developers in both the UK and the US canceling major fixed-bottom projects in recent months, having been hit by rising costs and supply chain disruption.

As it stands, the reality is that floating technology is still "at least twice as costly" as fixed bottom, according to Andrei Utkin, associate director for clean energy technology at Commodity Insights.

Observers said the industry needs to ensure the viability of traditional offshore wind projects before it can say that floating wind is investable on a commercial scale.

"There's so many things that people need to think about" in the offshore wind market, Utkin said in an interview. "The last thing they should be thinking about today is, how do we make it all float?"

Shortage of tenders

Analysts highlighted limited policy support for floating wind and a lack of routes to market.

To date, governments are still only selling seabed leases for floating wind capacity. That includes Scotland, which in 2022 awarded development rights to more than 14 GW of floating projects, and California, which completed its first federal offshore wind lease sale late last year.

Dedicated offtake auctions for floating wind that give projects a means to sell their electricity are still few and far between — a major reason for the slower growth outlook, according to Utkin.

"To have a project you need to have a tender first," Utkin said.

Some auctions are ongoing, for example in France, which is tendering for three projects of about 250 MW in size that aim to be commissioned by 2030 or 2031.

In other markets, floating wind procurements are experiencing problems.

In the UK's latest renewable energy auction, which failed to award even a single contract to a traditional offshore wind project because of the low ceiling price, floating wind farms were similarly absent, despite having a significantly higher bid ceiling.

Meanwhile in Norway — home to the world's largest floating wind farm, the 88-MW Hywind Tampen — a plan to auction three 500-MW floating sites in the Utsira Nord zone was delayed recently, with a new application deadline set for early 2024.

"It's about to happen [but] we see things being pushed back," Utkin said.

Offtake auctions for commercial-scale projects should materialize in the next two or three years, according to Bucica.

"For the moment the offtake mechanism for large projects and level of support ... is still unclear, even in key markets like UK or Norway," Bucica said. "All these translate into delay of sizable floating wind installations by a few years into the 2030s."

Stuck in pilot phase

Against an uncertain backdrop and the prospect of slower growth, the companies installing the first wave of floating turbines in Europe remain optimistic about the industry's future.

Yet the reality is that a desire to move beyond pilot projects and "industrialize" the floating wind supply chain is as yet unfulfilled.

Still, developers continue to reiterate the importance of smaller-scale projects in laying the foundations for larger ones. Pilots help companies learn about developing, consenting and operating floating turbines, according to Marlene Orth, offshore wind opportunities manager at Ocean Winds SL.

"If we could, we would go to commercial scale right away," Orth said at Reuters Events' Offshore and Floating Wind Europe conference in London in October. "All we need is for the supply chain to catch up."

Ocean Winds, the joint venture between Engie SA and EDP Renováveis SA, jointly developed the WindFloat Atlantic project off Portugal — one of Europe's first floating wind farms — and has another in development off France.

EDF Renouvelables SA is also building a pilot floating project in France and recently installed the first of three 8.5-MW turbines at the site.

Installation went "very smooth" but certain elements of construction and industrialization were "quite complicated," according to Pierre-Emmanuel Guillot, the company's director of asset management and operation strategy.

"We are looking forward to going to full commercial scale," Guillot told the conference, predicting that the industry's first 250-MW to 500-MW floating projects will be completed this decade.

For the industry's pioneers, that milestone cannot come soon enough.

"We can't continue with [just] showing that it actually works, it floats," said Sonja Chirico Indrebø, global head of floating offshore wind at Corio Generation Ltd., calling for a faster transition to full-scale projects.

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