What happens when the world’s fastest-growing renewable suddenly faces an 80 percent rise in costs? For offshore wind, the answer lies in smarter ships, not smaller ambitions. According to Bloomberg and Pareto Securities Equity Research, offshore wind project costs have climbed by roughly 80 percent since the 2021-2022 final-investment-decision window.
Forecasts for cumulative installed capacity by 2035 have been revised down by about 12 percent since 2022, with the steepest reductions in the United States and other new-entrant markets, and a 5 percent cut for Europe. These shifts are forcing developers, charterers, and vessel owners to revisit the assumptions that underpinned their business models only a few years ago. While the short-term environment looks challenging, investment in offshore energy remains resilient. Data from S&P Global and Clarksons show a large share of capital expenditure through 2027 is already committed across both the oil and gas sector and renewables. This demands flexibility.
Owners now need vessels capable of serving multiple roles, adapting to new technologies, and shifting between markets as conditions evolve.
The CSOV Glut
The offshore fleet today spans an exceptionally broad range of assets, from wind-turbine installation vessels (WTIVs) and heavy-lift cranes to commissioning-service and construction-support vessels, anchor-handling tug-supply ships, PSVs, FPSOs, jack-ups, semi-subs, drillships, and cable-layers. Each plays a distinct role, yet all are affected by the same investment trends. The most visible imbalance lies in the commissioning-service and service-operation vessel (CSOV/SOV) segment.
According to Pareto Securities Equity Research, about 28 SOV newbuilds were without employment when surveyed earlier this year. Some have since been contracted, but the wave of deliveries risks creating short-term overcapacity. This follows several years of intense ordering as wind developers raced to secure tonnage during the post-pandemic rebound. The subsea segment, by contrast, still shows buoyant order activity.
Pareto notes a high number of speculative projects in the orderbook, with investors betting on continued demand for cable-laying, maintenance, and installation capacity. For WTIVs, however, the story is quieter. Clarksons data confirm no new WTIV orders since 2023, though some analysts expect renewed activity as capacity pressures mount at Asian yards. Regional patterns are diverging. In Norway, the average build year of the PSV fleet is 2006, reflecting the aging of North Sea tonnage.
Brazil is emerging as the world’s largest offshore energy market, supported by Petrobras’ long-term contracting model. According to Clarksons, the company’s now active AHTS tender in Brazil and older fleet could stimulate a wave of new projects. The Middle East and Southeast Asia are also strong near-term drivers, with multiple projects moving in parallel. By contrast, U.S. offshore wind has stalled temporarily as developers re-price risk and adjust to inflationary conditions. The recent Maersk Offshore WTIV cancellation at Seatrium shows that the U.S. offshore wind development is in a really challenging period. These regional differences have practical design implications.
Operators active in Northern Europe or the North Atlantic must prioritize endurance, ice classification, and redundancy. In warmer, shallower regions such as the Middle East or Southeast Asia, efficiency, heat-tolerant equipment, and fast turnaround between projects become decisive. Flexibility in configuration, accommodation, and power systems now defines newbuild specifications.
Three Engines, Not Four
For vessel operators, changing market conditions demand new thinking on design efficiency. Offshore projects are moving into deeper waters and harsher environments, requiring greater endurance, deck capacity, and dynamic-positioning performance.
Thruster configuration, redundancy, and power-system integration are critical design variables. Optimized thruster placement and integrated control systems can yield significant efficiency gains while improving redundancy. Predictive maintenance and remote monitoring further reduce downtime and maintenance costs. Efficiency and reliability are inseparable in practice. Battery hybridization has moved from concept to standard practice. Shifting or downsizing engine configurations is increasingly achievable as battery capacity and control systems improve.
Batteries handle load balancing, peak shaving, and spinning reserve, enabling smaller engine sets to operate closer to their optimal efficiency points. Brazilian subsea tenders are already specifying ethanol and hybrid readiness, and more than 70 percent of PSVs under contract include some form of methanol-ready notation. Across the wider offshore market, about 90 percent of offshore construction vessels ordered in the past year have been specified as methanol-capable or methanol-ready. Hybrid architectures and DC grid systems are also gaining ground, enabling greater battery penetration and variable-speed gensets. Comfort-class vessels increasingly specify silent tunnel thrusters for reduced vibration and higher energy efficiency. Each of these advances lowers lifecycle costs while improving charter appeal. Although it is critical to evaluate each project separately, its operational profile and focus region in order to define the system and configuration that is most suitable from a CAPEX and OPEX perspective.
At Wärtsilä, Integrated System and Solutions are helping make these evaluations on potential projects. Designers are also being asked to consider operational emissions intensity alongside technical performance. While hybridization can reduce fuel use by up to 20 percent in typical offshore-support cycles, further savings come from integrated automation, smarter power management, and AI-assisted control algorithms. These digital tools continuously optimize propulsion, hotel loads, and maintenance scheduling, delivering both carbon reduction and improved vessel availability.
Recent orders illustrate the shift. Several new CSOVs and subsea vessels are being specified with battery energy storage systems sized for peak shaving and dynamic-positioning support. Others are opting for variable-speed hybrid propulsion that can switch seamlessly between power sources during installation or maintenance campaigns. These configurations are already proving their worth in trials, cutting fuel use and improving station-keeping performance in challenging weather windows.
Beyond the Fuel Debate
The energy transition has added another layer of complexity to offshore vessel design. Operators must balance immediate commercial viability with long-term fuel infrastructure uncertainty. The latest generation of offshore tenders reflects this push for flexibility. Newbuild specifications increasingly call for hybrid propulsion, biofuel compatibility and future fuel readiness, not tied to any single pathway.
In Brazil, ethanol is becoming standard, while European designs prioritize methanol readiness and battery integration to meet evolving regulatory and charter requirements. Hybridization delivers measurable savings even without a change in fuel type. Reducing engine running hours through battery support cuts maintenance intervals, improves reliability, and lowers emissions intensity. Combined with condition-based monitoring, this approach provides both environmental and economic resilience. Although much attention remains on newbuilds, retrofits are also gaining ground. Modular design and open architecture make it easier to integrate future-ready technologies without major structural modification.
By anticipating retrofit pathways early in the design process, owners can maintain competitiveness even as regulations and energy markets shift. This shift toward modularity also allows more incremental investment. Rather than committing to a full propulsion upgrade, owners can install battery systems, variable-speed gensets, or control upgrades in stages, spreading costs while capturing efficiency gains sooner.
Ready for Whatever Comes Next
Despite recent turbulence, offshore wind’s long-term outlook remains solid. According to BNEF, global installed capacity reached 75 GW in 2024, with 7.7 GW added that year alone. Even if the most ambitious targets are missed, capacity is still likely to more than double by 2035. Oil and gas continue to underpin global offshore investment, but production trends are uneven.
Output is expected to rise in most regions, while northwest Europe faces a gradual decline of about 1 million barrels of oil equivalent per day, according to GlobalData. This contrast underlines why vessel designs must serve both markets: oil and gas providing near-term utilization, with wind offering long-term growth. True resilience starts long before propulsion choices are made.
It is about developing platforms that can adapt across multiple cycles of market, technology, and policy change. Integration between thrusters, engines, batteries, and digital systems enables lifecycle optimization and smoother transitions to new fuel types. For most operators, that readiness will depend less on predicting the next regulatory step and more on embedding adaptability in every design decision today. The question for owners is no longer which fuel will dominate, but whether their ships will be ready when it does.
