Record €30B of European offshore wind financings in 2023 spells upbeat outlook

A record €30 billion of new investments were confirmed for European offshore wind projects in 2023, spread across eight wind farms totaling 9 GW, trade group WindEurope said Jan. 18.

Projects financed include Ørsted A/S' 2.9-GW Hornsea 3 wind farm in the UK; Orlen SA and Northland Power Inc.'s 1.2-GW Baltic Power wind farm in Poland; and Ocean Winds SL's 496-MW Iles d'Yeu et de Noirmoutier wind farm in France.

German utility EnBW Energie Baden-Württemberg AG also made a final investment decision (FID) on its 960-MW He Dreiht wind farm in Germany.

Poland is a particularly promising market thanks to ambitious deployment targets, legislative certainty and visibility on future projects, which are starting to foster investments in the local supply chain, WindEurope said. One example is Vestas Wind Systems A/S' recent decision to open a blade factory in the country, serving both local projects and the wider region.

A record year for investment decisions followed a weak 2022, during which "legal uncertainty and unhelpful market intervention" led to a drop in confidence, WindEurope said. FIDs in offshore wind stood at an all-time low of €400 million in 2022.

"Projects which had to postpone their final investment decision in 2022 are now moving ahead — excellent news for Europe's energy security and competitiveness," the trade group said.

Policy support in the European Union also helped projects along, WindEurope said.

Toward the end of 2023, the European Commission published its Wind Power Action Plan, with 15 immediate actions to support the sector. Twenty-six governments also signed the European Wind Charter, vowing to implement the policies laid out in the EU plan.

The wind power package included measures to accelerate permitting and improve auction design.

In the UK, the government increased the ceiling price for offshore wind in future auctions by 66%, after no bids for the technology were made during the 2023 auction.

Europe will build 5 GW annually over the coming three years, falling short of climate goals, WindEurope said.

"Investments in expanded and new factories, like the one now announced by Vestas, are indispensable," WindEurope said. "In parallel Europe needs to ensure the supporting infrastructure for offshore wind is in place. This means investing in grids, ports, and vessels."