According to a report by Rystad Energy, Europe’s offshore wind sector is facing a structural supply constraint, with turbine prices rising by between 40% and 45% since 2020 amid a shrinking pool of manufacturers and increasing market concentration.

The analysis highlights that GE Vernova has suspended new offshore wind turbine orders following technical and operational setbacks, leaving Siemens Gamesa and Vestas to supply nearly all turbines available to European developers. As a result, the market has become increasingly constrained, giving original equipment manufacturers (OEMs) greater pricing power and selectivity over which projects move forward.

Rystad Energy notes that turbine price increases have significantly outpaced manufacturing cost inflation, which rose by around 20% to 25% over the same period. The pressure is most acute in high-complexity components such as nacelles — which house generators, gearboxes and power electronics — and blades, where supplier concentration is high and substitution options are limited. In contrast, tower manufacturing remains relatively flexible due to a broader supplier base and lower barriers to entry.

The report also underlines a rapid technological shift in the market. While turbines delivered earlier in the decade typically ranged between 9 MW and 10 MW, recent installations are increasingly in the 14 MW to 15 MW class. Siemens Gamesa was the first to secure contracts for 14 MW turbines before moving into the 15 MW segment, while Vestas gained traction with its V236-15 MW model from 2024. Siemens Gamesa continues to hold the largest market share in terms of deliveries, reinforcing its leading position.

According to the analysis, the rise in turbine prices is not solely driven by higher input costs. Between 2020 and 2021, turbines were sold under contracts based on relatively stable cost assumptions. When inflation surged between 2021 and 2023, manufacturers absorbed the increased costs due to fixed-price agreements, compressing margins. As these contracts expired from 2023 onwards, prices were sharply reset, shifting the financial burden onto developers through higher turbine costs and stricter contractual terms.

Rystad Energy further models that a 30% increase in selected input categories would translate into an overall manufacturing cost increase of around 17%, illustrating how cost pressures vary across components in the value chain.

Sander Baksjoberget, senior offshore wind research analyst at Rystad Energy, said that while Europe’s offshore wind ambitions remain strong and backed by a robust project pipeline, the market is entering a structurally tight phase marked by high demand, limited supplier diversity and increasing turbine complexity.

He warned that unless Europe significantly expands Western manufacturing capacity or rethinks how supply constraints are addressed within auction frameworks, it may struggle to meet its post-2030 targets at the required pace and cost — particularly in a context of broader uncertainty linked to the conflict in the Middle East.