While the rise in new capacity signals progress, uncertainty remains regarding lease agreements—long-term contracts between landowners and wind energy companies. In 2024, a record 55 GW of offshore wind capacity was offered in lease auctions globally (excluding Mainland China).
However, not all of this capacity has been awarded, as offered capacity does not always translate into secured projects. For instance, the US saw no bids for its 3-GW floating wind auction in Oregon last year, while the Gulf of Maine auction awarded only about 7 GW of the 13 GW offered. Despite 2024’s record offerings, lease auction openings are expected to decline in 2025, with 30-40 GW anticipated—significantly lower than 2024 but still in line with levels seen in 2021 and 2022.
“Global offshore wind is set for a robust year in 2025; however, certain signals could affect its smooth upward trajectory. US federal policy is creating significant global ripple effects, hindering offshore wind development, especially in regions with substantial auctioned capacity.
“President Donald Trump’s January memorandum halting new leasing and approvals on the Outer Continental Shelf (OCS), citing environmental and safety concerns, could last throughout his term, pausing new developments and creating continued uncertainty for ongoing projects,” said Petra Manuel, Senior Offshore Wind Analyst at Rystad Energy.
Project delays in 2024 significantly impacted final investment decisions (FID) for new offshore wind projects, leading to a decline in project approvals. Only a handful of US projects reached FID last year, including Empire Wind 1, Sunrise Wind, and Coastal Virginia Offshore Wind.
A similar level of FID activity is expected in Europe and Asia this year, with a potential increase in the US as projects such as US Wind, SouthCoast Wind, and New England Wind move forward with offtake agreements and construction and operation plan (COP) approvals. The latter two postponed signing offtake contracts until March 2025.
Despite the slow pace of project sanctioning in 2024, some positive developments emerged. Developers advanced projects such as Red Rock Power and ESB’s 1.1-GW Inch Cape in the UK and Equinor’s 810-MW Empire Wind 1 in the US. Inch Cape, which formally announced its financial close in January 2025, secured 15-year contracts for difference (CFD) in both 2022 and 2024, providing revenue certainty and boosting investor confidence.
Other wind farms reaching FID in 2024 included Iberdrola’s 315-MW Windanker in Germany, RWE and TotalEnergies’ 795-MW OranjeWind in the Netherlands, and Ørsted’s 924-MW Sunrise Wind 1 in the US.
The UK, Poland, and Germany are expected to lead a surge in European FIDs in 2025, reaching 9.5 GW, with several projects in these countries on track for final approval. Poland, in particular, is set to see multiple major wind farms reach FID, including Polenergia and Equinor’s Baltyk II and III, following the recent FID for Ørsted and PGE’s Baltica 2 in late January 2025.
The post Offshore Wind Industry Set for Strong Rebound in 2025 first appeared on Energy Asia.
