Energy Musings - October 20, 2025

The latest offshore wind news suggests that this sector is experiencing further challenges. Now it is the European offshore wind industry that is struggling, as developers wrestle with the U.S.

Offshore Wind’s Trials And Tribulations Continue

Danish wind turbine manufacturer Vestas has just announced that it is shelving its plan to open its largest factory in Poland. The proposed plant, to be built outside Szczecin, was scheduled to start up in 2026 and employ 1,000 workers. The company said that the plant had been “paused due to lower than projected demand for offshore wind in Europe.”

The plant was located near the coast of Poland and was designed to manufacture blades for its larger, more powerful offshore wind turbines. Vestas noted in its second quarter 2025 earnings presentation that it had received no offshore wind turbine orders in the quarter. The company attributed the lack of orders to market weakness in the Americas. The weak offshore market was in contrast to the 2 gigawatts (GW) of onshore wind turbines, including 1,706 megawatts (MW) from Europe, the Middle East, and Africa, 227 MW from the Americas, and 76 MW from the Asian market ordered in the quarter.

According to the Financial Times, the European Union, the UK, and Norway have a combined offshore wind target of at least 129 GW either operating or under construction by 2030. However, TGS 4C, an offshore wind consultancy, says that they are on target for only about 84 GW, as Denmark and Germany held offshore wind lease auctions over the past 12 months but received no bids.

The Vestas offshore wind turbine business remains unprofitable. Management’s target is to achieve profitability soon, but current market conditions are making this more challenging to accomplish.

In researching this article, we came across an August 13, 2023, article by Microgrid Media titled “Vestas and Competitors Face Challenges Amidst Turbulent Wind Turbine Industry.” Two years later, the article’s title provides an appropriate description of the industry’s condition.

Vestas is currently supplying turbines for Equinor’s Empire Wind I project off New York. During the company’s second quarter, it reported having delivered 2 MW of turbines to the Americas market. That market includes the U.S., Brazil, Canada, Chile, and Argentina. We assume that the delivery was for Empire Wind, which was beginning construction. In 2024, Vestas delivered 13 MW of offshore wind turbines to the Americas market.

We were also intrigued to read a six-page pamphlet produced by Vestas outlining recommended changes to state Requests For Proposals (RFPs) that would improve the efficiency of the U.S. offshore wind market. The pamphlet was titled, “A guide for turning procurements into projects. This is not a wind farm.” These phrases were on the cover of a schematic drawing of a large offshore wind turbine, with others pictured in the background.

The pamphlet began by discussing the potential 2024 East Coast offshore wind market. Vestas said that the states could award up to 16 GW across six offshore wind solicitations, while the Bureau of Ocean Energy Management is planning lease auctions that could offer another 50 GW of market potential.

Under the heading, “But Plans Are Not Wind Farms,” Vestas wrote:

The “technology arms race” has resulted in some offshore wind bidders proposing projects based on immature, untested wind turbines in response to State RFPs.

State RFPs often lack a significant focus on technology and supply chain readiness, which are crucial for ensuring successful and timely project delivery.

Additionally, state by state local content mandates, requiring turbine manufacturing as a condition of offtake, have failed as a policy mechanism and is one of the contributing factors regarding recent project cancellations up and down the East Coast.

If we continue down this road, our offshore wind farms, and climate goals, will never be more than plans.

The Vestas pamphlet was conceived to provide solutions the company felt would reduce roadblocks that were curtailing the pace of East Coast offshore wind development. It perceived that the market’s problem is that the East Coast was not being developed as a single market, but rather individual state markets, each with their own set of qualifications. It was also aimed at competitors like GE and Gamsa that were offering newly designed large offshore wind turbines that were barely off the drawing boards, with little testing history.

Denmark-based Vestas was used to dealing with single government agencies in countries. The large single market concept would force the standardization of requirements. However, Vestas executives appear not to have appreciated the battle being waged among the coastal states to become the hub of the East Coast offshore wind market.

Each state, when it initiated its offshore wind program, believed it had the port infrastructure and shore facilities that would support the industry staging all, or a substantial portion of its East Coast offshore activity. Most states saw offshore wind as part of their economic development efforts, something many of the states were desperate to promote. As a result, there was a heavy emphasis placed on the financial benefits a developer would offer the state if it were the successful bidder in the offshore wind solicitations.

This focus ensured that lots of offshore wind developer money was spread around each state to win the favor of promoters. Beneficiaries included local community governments, social agencies, and non-governmental organizations pushing climate change actions. Of course, academia was a significant target for buying support, as was the local media. Virtually every potential source of public support benefited from the largess.

To create a European-centric development program, Vestas’ recommendations involved streamlining the procurement process. It wanted the states to avoid so many state-specific requirements. In other words, drop the requirements for the developer to commit to economic contribution thresholds. Vestas also believed that offshore wind electricity pricing should include indexation to help protect against rising costs and higher interest rates. Here is the list of recommendations Vestas offered to translate plans into projects.

Prioritize the award of offtake contracts to bidders that have selected turbine technology that is mature, tested, and commercially available to ensure on-time project delivery and industry scalability. It w

Rigorously evaluate supply chain, infrastructure, and interconnection readiness in State RFPs and prioritize the award of offtake contracts for projects that demonstrate maturity.

Avoid awarding or heavily incentivizing bids with domestic manufacturing commitments in State RFPs.

Build indexation into PPAs or ORECs to enable benefit and cost sharing between awarded projects and ratepayers, and increase the resiliency of projects to withstand future uncertainties.

None of this has or is likely to happen. The bigger question is how big the East Coast offshore wind industry will become, given the review of the projects and leasing that is currently underway.

While Vestas cited the lack of American offshore wind orders, its decision to shelve the new Polish plant reflects the weakness in the European offshore wind market, the company’s core market. Their announcement comes only weeks after fellow Danish offshore wind developer Ørsted announced it would be reducing its labor force by 25%, or 2,000 jobs. The downsizing comes as the company sees the end of its current construction projects and sees a significantly smaller offshore wind market in the near future.

What comes next for Ørsted and Vestas? That partly depends on the outcome of the U.S. review, as well as the global climate change movement. In that regard, we were interested in a Financial Times article based on an interview with Colette Hirstius, president of Shell USA, the top Shell official in the U.S. She was quoted as saying, “I think uncertainty in the regulatory environment is very damaging. However far the pendulum swings one way, it’s likely that it’s going to swing just as far the other way.” That comment was in reference to the Trump administration’s offshore wind stop-work orders.

Before quoting Hirstius, the Financial Times stated that she believed that energy projects with proper permits should be allowed to proceed. We do not know if she used the word “proper” to describe the projects or if the writer chose that term. However, that term is the subject of the review ordered by President Trump. If shortcuts were taken, appropriate evaluations were not conducted, all legal considerations were not weighed equally during the approval process, are the permits proper? If not, then should the projects be subjected to correct approval processes before being allowed to move forward, if approved?

While the American offshore wind market faces an issue with its approval process, the costly electricity is contributing to higher consumer power bills. Rising energy costs for families are a significant factor in the waning support for green energy mandates around the world. That may have a much bigger impact on the plans of Ørsted, Vestas, and Shell.