The UK continues to position itself at the forefront of offshore wind, second only to China in installed capacity and currently accounting for around 20 percent of the world’s offshore wind power capacity. With the government’s Clean Power 2030 ambition to decarbonise the grid within the next five years, the sector faces both major opportunity and significant challenges. At the recent offshore wind session for London International Shipping Week, industry experts came together to discuss where the market is heading and what stakeholders should prepare for.

UK net zero and AR7: A pivotal moment for industrial strategy

The contracts for difference (CFD) scheme remains central to offshore wind investment. After the setbacks of allocation round (AR) 5, hopes are high that AR7 will provide the price certainty developers and investors need. With a substantial pipeline of projects nearing consent, the outcome of AR7 will be a decisive signal to the market. From a delivery perspective, the biggest hurdles remain planning timelines, grid connections and supply chain bottlenecks, with projects taking more than a decade to reach completion. Broader economic conditions, particularly interest rates and inflation, are also challenging.

Policy reform and spatial planning initiatives are underway to address these issues, but ensuring public engagement, encouraged by community benefit funds, fair compensation, and tangible economic benefits, including jobs across construction, ports, and vessel operations, is essential to maintaining support and will also be critical to progress. 

The offshore wind sector is increasingly viewed as a driver of UK industrial strategy and job creation as well as simply a method of generating clean power. The government has placed clean energy at the heart of its agenda. Even if the 2030 target is missed, setting ambitious goals still provides direction and impetus for investors and the supply chain.

Delivering fast-moving technology challenged by supply chain pressures and vessel availability

Technology is moving fast. Turbines have grown to 14-15MWh, and 20MWh designs are on the horizon. Bigger turbines lower costs, but ports, factories and vessels all need to scale up in parallel. Constant change risks outpacing investment, so stability is as important as innovation.

At the same time, supply chain constraints are creating opportunities for new entrants. While Chinese turbine manufacturers have yet to supply the UK market, their ability to scale quickly makes them a potential player in the future. A diversified and competitive supply chain is seen as critical for resilience and cost efficiency.

Offshore wind construction requires significant vessel capacity, often more than initially projected. Hornsea 2, for example, required 91 vessels during construction, far more than expected. With oil and gas competing for the same fleet, day rates remain high and newbuild prices have surged: construction service operation vessels (CSOVs) have more than tripled in cost in recent years.

Keys to success

For all stakeholders, the message is clear: success will depend on collaboration across the value chain, continued policy support, and a willingness to innovate in both technology and finance. Offshore wind remains one of the UK’s strongest industrial success stories, but sustaining that success will require careful navigation of the challenges ahead.