Shoreline Wind, a full lifecycle SaaS solution built for wind farm O&M, construction, and design, recently published its latest white paper, “HEADWINDS: Offshore supply chain can boost profits despite challenging times ahead.” The paper offers an optimistic yet clear-eyed analysis of the opportunities and challenges facing the sector’s supply chain as the industry gears up to meet ambitious 2030 global renewables targets.
The global offshore wind sector is on the brink of unprecedented growth. In 2023, a record 10.8 GW of new capacity was installed, bringing the total to 75.2 GW worldwide. The Global Wind Energy Council (GWEC) forecasts that 140 GW of new installations will be needed between 2024 and 2028, requiring annual growth rates nearly triple the current pace. With demand surging, driven by ambitious 2030 targets, offshore wind is uniquely positioned to drive a significant portion of the energy transition.
Despite the immense opportunities, the white paper details the supply chain must address several systemic challenges. Competitive tenders have historically led to a “race to the bottom,” forcing developers to accept lower strike prices and pay higher costs for development rights.
For example, U.K. strike prices plunged from 150 pounds/MWh in 2014 to under 40 pounds/MWh by 2020, while in Germany, developers recently paid 12.6 billion euros for 7 GW of development rights. This hyper-competitive environment has contributed to project delays and, in some cases, failed tenders, including the recent auction in Denmark.
The ripple effects of these dynamics have tightened profit margins across the supply chain, curtailing investment in innovation and scaling capacity. Smaller supply chain companies are particularly vulnerable, with many unable to compete against lower-cost rivals. Additional hurdles such as staffing shortages, port capacity constraints, and a slowdown in capital investment — particularly from U.S. markets into Europe — are further compounding the challenges.
“Offshore wind’s global supply chain is facing critical systemic challenges,” said Ole-Erik Endrerud, founder and chief product officer at Shoreline Wind. “To achieve the 2030 targets, the industry needs to move beyond short-term cost cutting and focus on building a resilient, innovative supply chain that can deliver consistently, and at scale.”
The white paper puts forward key recommendations to address these systemic issues. Governments, for instance, can play a crucial role by providing clearer policy direction, driving long-term investment security. Countries such as France, Germany, and The Netherlands have successfully demonstrated how integrating non-price criteria in tender processes can create more sustainable and viable projects.
Developers also can drive change by removing barriers for supply chain companies. Standardized contracts, improved payment terms, and greater predictability can empower smaller firms to invest in innovation and efficiency. Moreover, leveraging specialist service providers to optimize operations and margins can enable companies to focus on their core strengths while enhancing project delivery.
“Specialization drives supply chain resilience, profitability, and sustainability,” Endrerud said. “By leveraging expert providers and specialists, we create a model that boosts margins, fosters innovation, and accelerates industry growth. Additionally, adopting digital platforms that facilitate more fluid and tighter collaboration across the supply chain can streamline operations, align construction timelines, optimize port usage, and better manage project risks — key steps toward a more efficient and sustainable supply chain. Our latest white paper provides a clear path forward. The offshore wind sector has a unique opportunity to transform its supply chain into a robust, innovative, and collaborative ecosystem. With the right strategies in place, the industry can meet its ambitious targets and continue driving the global energy transition.”
More info: shoreline.no
