Offshore wind developers are finding it harder to take their projects from the development stage and into construction over the last few years.
One of the most high-profile cancellations in the UK this year was the 2.4GW Hornsea 4, which developer Ørsted stopped in May. The Danish utility attributed the cancellation to increased supply chain costs, higher interest rates and increased risks of delivering it on time and on budget. This came even after the UK Government gave backing to Hornsea 4 in the Contracts for Difference (CfD) allocation round six on 3rd September 2024.
It is not the only developer to face these kinds of offshore wind challenges. Vattenfall exited its 4.2GW Norfolk Offshore Wind Zone in March 2024 by selling the area with three fully consent wind farms to RWE for £963m; and SSE Renewables has repeatedly pushed back the commissioning date of the 3.6GW Dogger Bank to the end of 2027 due to weather and supply chain issues.
We looked at these trends this year in our white paper on the offshore wind supply chain.
Even so, there are plenty of offshore wind farms still moving through development in the UK. On 31st July, SSE Renewables secured Scottish Government consent for the 4.1GW Berwick Bank and will now seek support from the UK Government in the CfD allocation round 7 (AR7) that is due to open for applications this month and where winners are due to be announced by early 2026. The project will also need a final investment decision.
The UK Government has taken steps to increase the number of bids in AR7 by clarifying that fixed-bottom projects will be able to bid for CfD support without full planning consent; that CfD lengths will be increased from 15 years to 20 years to give developers certainty for the longer term; and reserving the right to raise the budget after analysing the projects that would narrowly lose out. However, opening the process to more bids may also mean that more projects with marginal business cases end up winning support.
In addition, the UK Government has decided that developers will not be able to sacrifice CfDs won in previous rounds to re-bid on better terms in AR7. It wants to encourage firms to submit realistic bids instead of bidding over-optimistically and then facing trouble later.
But offshore wind developers cannot only look to policymakers to solve the problems that make perilous the path to take a development-stage asset into construction. Using smart digital solutions can enable developers to take decisions that boost project viability and unlock renewable energy investments.
Improving viability
Offshore wind developers are under pressure to make their projects more viable, and can achieve this with the interventions they make through the project life cycle.
This can include using simulations based on artificial intelligence (AI) to optimize projects during the design and development phases, but also to respond to the short-term changes that can arise through construction.
Companies can also use AI for project management to ensure they are allocating technicians and physical resources effectively during planning, construction and operations; and ensure they are building and commissioning projects effectively in a sector where changing weather conditions, unpredictability in the value chain, and ever-evolving site requirements can thrown even the best-planned project off track.
For example, in late 2024, Shoreline formed a partnership to support developer Parkwind, part of JERA Nex, in the design and construction phases of offshore wind developments. Parkwind said using software helped it to plan projects more effectively, which enabled it to cut operational costs and improve overall performance in the design and construction phases of its projects. Such approaches boost viability and improve deliverability, while moving the industry on from its historic reliance on spreadsheets.
Harnessing this technology is vital if developers are to navigate changing offshore wind trends and support countries to deliver their offshore wind targets.
In February, WindEurope reported that there was 37GW of offshore wind operational in Europe, led by the UK (15.9GW), Germany (9.1GW) and the Netherlands (4.7GW); and forecast that this would grow to 84GW by 2030, with the top three positions still held by the UK (35.5GW), Germany (18.3GW) and the Netherlands (10.4GW).
The opportunity is there for developers, but they will only be able to take advantage if they have viable projects. The right technology can help give them the edge.
Discover how Shoreline’s AI-powered planning and execution software can help future-proof your offshore wind projects. Request a guided tour today!
