Europe’s offshore wind monopile market is moving from concerns over insufficient manufacturing capacity to a period of weak factory utilization coming from offshore wind projects skewing to the right on the timeline. European producers have invested heavily in larger facilities capable of supplying the XXL foundations required for the latest generation of offshore wind turbines, but project delays and slower investment decisions mean that demand is not arriving as quickly as the new capacity.

Rystad Energy estimates that European XXL+ monopile manufacturing capacity will rise from around 1.2 million tonnes in 2024 to 2.7 million tonnes from 2027. Factory utilization is expected to sit at around 32% in 2026 and 2027 before falling to just 19% in 2028. Loading improves later in the decade as more projects enter manufacturing, reaching close to 50% in 2031 under the current project pipeline.

The shift is already affecting contract economics. Manufacturing a representative monopile in Europe is around 38% more expensive than in March 2020, with modeled manufacturing cost rising from $2.50 million to $3.46 million per kilotonne. Selling prices, however, have moved lower from their 2022 peak as suppliers compete for future production slots. For a representative 1.6-kilotonne monopile, Rystad Energy estimates that the modeled European supplier margin has fallen from around $0.93 million in the 2024 reference case to about $0.20 million today, equivalent to roughly 3% of the selling price.

The change is particularly striking compared with the market in 2021 and 2022. When Ocean Winds reserved monopile capacity with China’s Dajin Heavy Industry for Moray West in December 2021, available production slots at established European suppliers were tight. Sif had signed Dogger Bank C only one month earlier and said the three Dogger Bank phases extended its order book well into 2024, while EEW was also carrying a substantial forward workload. Dajin described the market at the time as facing fabrication-capacity bottlenecks.

That environment helped justify a wave of European capacity investment. Sif, for example, subsequently more than doubled its annual capacity to around 500 kilotonnes through its Maasvlakte 2 expansion, adding the ability to manufacture substantially larger foundations. Similar investments across Europe have lifted technically relevant XXL+ capacity well ahead of near-term contracted demand.

Chinese suppliers are now competing under very different conditions. Rather than primarily filling gaps left by constrained European factories, they are bidding into a market where European suppliers themselves need additional orders. Rystad Energy estimates current Chinese monopile manufacturing cost at around $2.03 million per kilotonne, about 41% below the European reference.

That cost gap gives Chinese suppliers more flexibility to absorb freight, carbon costs and lower margins when targeting European projects. In Rystad Energy’s modeled 1.6-kilotonne reference case, a Chinese monopile can land in Europe at around $6.35 million even after including ocean freight and the EU Carbon Border Adjustment Mechanism, depending on the supplier margin and CBAM treatment. The comparable modeled European selling price is around $6.69 million. The analysis illustrates why higher trade and logistics costs can narrow China’s advantage without necessarily eliminating it.

The European market remains dominated by local manufacturers. Sif accounts for around 31% of firm contracted monopile tonnage in Rystad Energy’s current dataset and EEW around 22%, while Dajin represents roughly 12%. But monopiles are also more easily split between suppliers than offshore turbines, allowing developers to introduce additional manufacturers into tenders without awarding them an entire project.

The longer-term risk is that today’s surplus does not remain permanent. Monopile factories carry high fixed costs, and several recent investments were made on the expectation of rapid offshore wind growth and progressively larger foundations. If project delays keep European utilization low for several years, suppliers may defer further investment, mothball production lines or ultimately remove capacity from the market. Germany illustrates the uncertainty: 17.8 GW of offshore wind sites were awarded between 2023 and 2025, while projects representing around 16 GW could potentially fall within an industry-proposed voluntary site-return mechanism.