Europe’s offshore wind expansion is running into a structural supply constraint where the turbine market is becoming increasingly concentrated. GE Vernova, Siemens Gamesa and Vestas have historically anchored Western offshore turbine supply, but with GE Vernova having paused new offshore wind orders following a series of technical and operational setbacks, Siemens Gamesa and Vestas now account for virtually all turbines available to European developers. Rystad Energy’s analysis of the offshore wind market outlines a sharp increase in per-megawatt (MW) costs, with turbine selling prices rising by between 40% and 45% since 2020, outpacing manufacturing cost increases of 20% to 25% over the same period.
This pricing pressure is most acute in the turbine’s most complex components. The nacelle, which houses the generator, gearbox and power electronics that convert wind into electricity, sits at the center of current supply constraints, while similar pressures are emerging in blade manufacturing, driven by increasing turbine sizes, longer production cycles and the logistical demands of transporting and installing next-generation components.
The supply constraint is not evenly distributed across the turbine value chain. It is most pronounced in nacelles and blades, where supplier concentration is high and substitution is limited, while towers remain comparatively more flexible, with a broader supplier base and lower barriers to entry. As a result, the market is becoming increasingly constrained in its most critical components, shaping the overall balance between supply and demand.
Europe’s offshore ambitions are real, and the pipeline reflects genuine political commitment. But the market has moved into structurally tight territory: high demand, limited supplier diversity and rising turbine complexity. That combination gives original equipment manufacturers (OEM) real pricing power and the ability to be selective about which projects get built. If Europe doesn’t meaningfully expand Western manufacturing capacity or rethink how supply constraints are addressed in its auction frameworks, it won’t deliver its post-2030 targets at the pace or cost the energy transition requires; especially in the current climate that has so much uncertainty as a result of the middle east conflict,
Source: Rystad Energy by Sander Baksjoberget, Senior Analyst, Offshore WInd Research
