Continent’s offshore wind expansion is running into a structural supply constraint as the turbine market becomes increasingly concentrated
So says a report from Rystad Energy, which notes that, although GE Vernova, Siemens Gamesa and Vestas have historically anchored Western offshore turbine supply, Siemens Gamesa and Vestas now account for virtually all turbines available to European developers, GE Vernova having paused new offshore wind orders following a series of technical and operational setbacks.
Rystad Energy’s analysis of the offshore wind market outlines a sharp increase in per-megawatt (MW) costs, with turbine prices rising by between 40% and 45% since 2020, outpacing manufacturing cost increases of 20% to 25% over the same period.
Rystad Energy said pricing pressure is most acute for a turbine’s most complex components. The nacelle, which houses the generator, gearbox and power electronics that convert wind into electricity, sits at the centre of current supply constraints. 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.
Rystad Energy said 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. Towers remain comparatively 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.
Rystad Energy senior analyst offshore wind Sander Baksjoberget said, “Europe’s offshore ambitions are real, and the pipeline reflects genuine political commitment. But the market has moved into structurally tight territory,” said Rystad Energy, “with high demand, limited supplier diversity and rising turbine complexity, a combination that gives OEMs real pricing power and the ability to be selective about which projects get built.”
Rystad Energy’s analysis of price pressure suggests that, if Europe doesn’t expand manufacturing capacity or rethink how supply constraints are addressed in its auction frameworks, it won’t be able to deliver post-2030 targets at the pace or cost the energy transition requires.
The mix of turbines being delivered between 2020 and 2027 shows how quickly the market has changed. Earlier years were dominated by smaller 9 MW to 10 MW turbines, while more recent deliveries are shifting toward the larger 14 MW to 15 MW class. Siemens Gamesa was first to move into bigger turbines, signing contracts for its 14-MW model ahead of Vestas before moving into the 15-MW class, while Vestas’ V236-15-MW grew in popularity from 2024 onwards. Siemens Gamesa still holds the larger overall share of deliveries, cementing its position as the market leader.
“The shift in turbine size is important context for understanding price increases,” said the report. “Turbines being built and installed today are significantly larger and more complex than those five years ago, and that complexity is reflected in what OEMs can charge.
“The 40% to 45% rise in turbine selling prices since 2020 cannot be explained by rising costs alone.
In 2020 and 2021, turbines were sold under contracts that assumed relatively stable input costs, and when inflation hit hard through 2021 to 2023, manufacturers were locked into those agreements and absorbed the losses themselves. When those contracts expired beginning in 2023, prices reset sharply and the burden shifted to developers, who now face higher turbine prices and tighter contract terms. Manufacturers are recovering their margins on newer deals, although profitability across offshore divisions remains squeezed by the costs of ramping up and scaling a new generation of larger, more complex turbines.”
The company’s analysis says the key shift in the offshore turbine market is not just the level of cost inflation, but how costs are distributed across the value chain. Rystad Energy’s analysis models a scenario where a 30% increase in selected input categories would increase total manufacturing costs by around 17%, reflecting how different components are exposed to different cost drivers.
The ability of manufacturers to absorb such increase has also changed. Between 2021 and 2023, OEMs were largely locked into fixed price contracts and absorbed rising costs through margin compression. As those contacts have rolled off and supply conditions have tightened, newer agreements are being signed with less pressure on OEMs to take on that risk. While developers continue to anchor project economics, suppliers are now in a stronger position to pass a larger share of future cost increases through to developers via higher turbine prices and stricter contract terms.
