Supply squeeze: Europe's offshore wind sector sees turbine prices jump 40-45% as manufacturer options shrink

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,

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The mix of turbines being delivered between 2020 and 2027 shows how quickly the market has changed. Earlier years were dominated by smaller 9 to 10 MW turbines, while more recent deliveries are shifting toward the larger 14 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 onward. Siemens Gamesa still holds the larger overall share of deliveries, cementing its position as the market leader. This shift in turbine size is important context for understanding price increases: the turbines being built and installed today are significantly larger and more complex than those from 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 from 2023 onward, 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 key shift in the offshore turbine market is not just the level of cost inflation, but how those costs are distributed across the value chain. Rystad Energy’s analysis models a scenario where a 30% increase in selected input categories would raise 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.

Contacts
Sander Baksjoberget
Senior Analyst, Offshore Wind Research
Phone: +47 24 00 42 00
sander.baksjoberget@rystadenergy.com

Alexander Flotre
Head of Offshore Wind Research
Phone: +47 24 00 42 00
alexander.flotre@rystadenergy.com

Kartik Selvaraju
Communications Manager (APAC)
Phone: +65 8779 4619
kartik.selvaraju@rystadenergy.com 

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