Max McArdle co-authored this piece.

Stout brought together two senior offshore wind industry leaders — Duncan Clark, a veteran of the offshore wind development, and Philippe Kavafyan, an experienced OEM and supply chain executive — to debate some of the key pressing questions facing the European offshore wind sector from both the developer and OEM/supply chain perspectives.

Duncan Clark had a long career at National Power, later part of RWE, and he was, most recently, Head of European Development at Ørsted, overseeing strategic expansion and project pipeline across the region. Prior to that, he was Head of Region UK&I, where he led the development and asset management of the largest fleet of offshore wind assets in the country. He joined Ørsted, then DONG Energy, in 2012.

Philippe Kavafyan’s career in energy and offshore wind spans more than three decades. He served from 2018 to 2020 as CEO of MHI Vestas Offshore Wind, the offshore turbine OEM, and went on to lead Aker Offshore Wind before joining its parent, Aker Horizons, as Executive Director. His earlier career included senior positions at General Electric and Areva Renewables, and he currently provides advisory services to the wider offshore wind sector, with particular focus on O&M and asset management.

What follows is a summary of their views on each of the five questions Stout posed.

Stout’s Summary of the Interview

The shared view of Duncan and Philippe is that European offshore wind is mid-way through a necessary reset, following the exuberance of 2018 to 2022 when new entrants from the oil and gas sector overpaid for seabed rights, OEMs invested in successive new platforms without amortising the previous one, and governments set auction ambitions that struggled to reconcile with supply chain reality. The shared prescription for the sector rests on turbine standardisation over scale, auction predictability over price discovery, and a recognition that grid, vessels, and workforce are now the binding constraints.

Where the speakers diverged most sharply was on the role of the state: Duncan having a market discipline frame whilst Philippe was pushing for European government equity stakes in the offshore OEMs to support needed investment. Both, however, agreed that the binary question of whether to admit Chinese turbines is a distraction. The real question is whether European OEMs can be structurally and commercially sustainable as credible suppliers of the most complex and capital-intensive part of the energy transition.

In Stout’s view, three structural shifts now under way will define the shape of the European offshore wind industry over the remainder of this decade.

Workforce

Every other constraint identified such as grid delivery, industrial capacity, vessel availability, and O&M effectiveness, ultimately rests on the availability of skilled people in the right places. The industry will need transformer winders, blade technicians in coastal manufacturing plants, offshore technician crews willing to live two weeks on and two weeks off at sea, and technicians comfortable with the different work-rest patterns demanded by SOV based deepwater maintenance versus daily CTV commuting. Philippe’s caution about advising a 25-year-old to enter the sector today is the clearest signal: an industry that cannot offer credible career paths to the next generation will struggle to deliver the projects to which it has committed to the 2030s. The policy debate has focused on capital; however, the labour question is equally important.

Grid

The wind farms themselves can be built; the high voltage transformers, converter stations and onshore reinforcements required to connect them at scale cannot be conjured to the same project timescale. The supply chain for grid equipment is constrained by demand from across the wider energy transition — electrification of heat and transport, data centre build out, and replacement and up-rating of ageing transmission infrastructure — with which offshore wind is competing for the same finite manufacturing and engineering capacity. On major projects such as Dogger Bank, the HVDC connection and converter stations cost as much as the entire turbine contract. Yet the grid debate continues to be conducted as if it were a downstream consequence of generation decisions, rather than the central infrastructural constraint that determines what generation can actually be built.

Consolidation

Amongst developers, the oil and gas majors who entered the sector in the late 2010s have largely exited or are visibly retrenching and a longer-term, asset manager led ownership structure is emerging, dominated by the utility-scale operators (Ørsted, RWE, SSE, and Vattenfall) and the large infrastructure funds. On the OEM side, GE Vernova’s effective withdrawal has already consolidated the Western OEM base to two credible suppliers. We expect further consolidation amongst developers and owners over the next three to five years, through exits and mergers, and the emergence of more clearly defined specialist roles. The investors and operators best positioned to navigate this consolidation will be those who recognise it as a structural rather than cyclical shift. A more consolidated industry can plan workforce development more coherently. A more reliable grid build-out gives that industry the visibility it needs to commit to long-term capital investment. The participants who recognise this interdependence and who position themselves accordingly will be the ones who benefit most from the next phase of European offshore wind’s development.

Throughout this article, the developer perspective is that of Duncan Clark and the OEM and supply chain perspective is that of Philippe Kavafyan.

What do developers most need from OEMs and the supply chain today that they are not consistently getting? Conversely, how can developers work better with OEMs to improve wind farm construction and operations?

The Developer View

The baseline expectation that turbines work, serial defects are avoided, and technology integrates reliably into complex, time sensitive offshore projects should be non-negotiable, but history shows such failures have occurred across most major components. GE Vernova’s recent platform difficulties are the most visible current example of how badly this can damage project returns.

The more structural problem is the mismatch between supply chain lead times and the way competitive auctions are run. With three- to five-year lead times on turbines and installation vessels, developers bidding into auctions face a difficult position: the supply chain sees a dozen developers competing for the same production slots, knowing only a minority will win and not being able to rationally reserve capacity and mature the contracting for any one of them. To increase bid certainty requires a proliferation of pre-award manufacturing and vessel reservation agreements, loading substantial cost onto developers at precisely the moment their risk profile is highest. Equally, price and risk allocations agreed before bid submission must be honoured through to FID and execution. The Vattenfall Norfolk Boreas CfD handback was less a story of developer failure than of risks never properly allocated in the first place.

Conversely, when it comes to collaboration between developers and OEMs and the supply chain, developers need to be realistic about what they are asking the supply chain to commit to. Some bids were submitted without a clear approach to interest rate, commodity, and supply chain risk. The UK’s Allocation Round framework approach of excluding CfD holders who fail to reach FID is a reasonable mechanism to ensure balanced bidding discipline. More importantly, developers should assume the risks they are best placed to manage, including planning, grid, consents, stakeholder, and environmental approvals, and leave technology, manufacturing, and vessel risk with those who own those processes. When the two get blurred, value is destroyed on both sides.

The OEM and Supply Chain View

The supply chain would significantly benefit from more predictability. The 2018 to 2022 period was a bonanza for developers such as Ørsted, with utilities building cheap concession portfolios and farming them down with substantial valuation uplift. There was constant pressure for OEMs to deliver large, more efficient turbines and, from 2022, interest rate rises, capex inflation and supply chain shocks significantly compressed economics. The consequence for OEMs was an inability to amortise their investment: successive new turbine platforms, each requiring hundreds of millions in R&D and new factory tooling, were launched without the order volumes needed to recover those costs before the next generation was demanded. The relentless pressure to reduce LCoE did not translate into genuine productivity gains but into OEM margin compression.

The prescription is standardisation over turbine scaling. Rather than chasing 20 MW to 25 MW turbines, the industry should consolidate around the 15–16 MW class, which is compatible with existing monopile foundations, installable with the new generation of vessels, and capable of rebuilding reliability through repetition. Developers must stop treating each project as a bespoke engineering exercise. Every new foundation diameter, turbine variant and vessel specification carries a cost ultimately borne by the supply chain in unamortised tooling and lost learning. Further supply chain investment will only follow firm volume commitments, which will also be supported by standardisation, and the new factory commitments — contingent on orders being received by major OEMs — are not weakness but discipline.

On local content, Taiwan is the most damaging example in the industry with developers required to commit to industrial plans with a supply chain not yet capable of delivering, resulting in delays, disputes, and value destruction across the chain. A social contract framing around jobs and skills is a more honest mechanism than prescriptive component-level local content rules.

Duncan and Philippe both agreed that operational excellence in installation and commissioning is now the key differentiator, not turbine technology. A modern installation vessel costs around $350,000 a day; if installing each turbine at a Dogger Bank-scale project takes several days instead of one, it is not a contingency line being eroded but project economics being destroyed. A modern offshore wind farm is the product of perhaps a dozen large contracts or three hundred small ones; if any single one fails materially, all the other billions spent are at risk. The project owners are the only party positioned to carry that aggregation risk.

How should European offshore wind balance the need for lower cost turbines and faster deployment against the desire for security and a resilient domestic supply chain?

The Developer View

Security of supply is a legitimate requirement, and indeed the first duty of government. Duncan did not argue with a decision to keep out of critical infrastructure Chinese OEM Ming Yang, whose offshore turbines have been excluded from major UK projects. But he was quick to add that excluding one Chinese manufacturer does not eliminate Chinese exposure. The offshore wind supply chain is already deeply integrated with Asian and Chinese components within turbines, power electronics, substations, and the broader balance of plant. Security, in his framing, is a portfolio question, not a binary one.

Developers want more, credible supply sources in the market, but not new factories forced into locations that lack the industrial platform to support them. The UK’s emerging Clean Industry Bonus framework, which rewards but does not mandate local content, is a more honest mechanism than the local content rules that came before it. On GE Vernova’s effective withdrawal from the offshore market, Duncan was sympathetic to the board’s predicament; funding another half billion-dollar platform when GE Vernova’s share price is being driven by gas turbines and data centre demand is a difficult ask. However, if the consequence is a Western OEM market which is reduced to a Vestas–Siemens duopoly precisely when Europe needs more competition, this is a serious strategic problem with no obvious near-term fix.

The OEM and Supply Chain View

Philippe took a more interventionist line. The right answer to Chinese competition, in his view, is not simply to exclude Ming Yang. It is for European governments to take equity stakes in the European OEMs. The Danish government already has a stake in Ørsted so why are there not equivalent arrangements for the OEMs themselves? Offshore wind, Philippe argued, has more in common with aerospace than with onshore wind, where there are a small number of firms operating in a safety critical, capital-intensive sector. “Do we need more than Airbus and Boeing? No. There are only two.” The implication is that Europe should accept that offshore wind will be a two- or three-supplier industry and design policy accordingly, including state participation in equity where current margins cannot fund the resilience the system needs to manage risk through long cycles.

Philippe was equally insistent that any government support must be ring fenced to the offshore business. He drew a structural distinction between onshore and offshore markets that, in his view, is too often missed: onshore is a products business in which the turbine accounts for the bulk of a project’s capex, whereas offshore is a project business in which the OEM collaborates with vessel, cable and balance-of-plant providers. Combining both into a single P&L has, in his view, contributed to under-investment in the offshore-specific capabilities the industry now needs. Should a Chinese turbine reduce capex of the turbine by even 30%, which translates to around 10% of the overall project capex, this would bring an unquantifiable set of ecosystem risks on the project’s deliverability. Few developers, in his view, would make that trade-off for a 10% capex saving on a multi-billion pound project.

How will the O&M provision evolve over the next five years, and will there be a shift to larger scopes with availability or uptime-based contracting?

The Developer View

Offshore wind O&M, in Duncan’s view, will not converge on a fully outsourced, tier-one model in which an independent service provider carries the full asset risk for the assets’ operating life. The reason is technological: a third-party service provider selling skilled technician days cannot underwrite the availability of subsystems they did not design and whose long-term wear-out behaviour they cannot predict. The OEM must remain responsible for the underlying equipment, particularly during the warranty period when investors and lenders are taking comfort from the fact that the OEM stands behind the technology.

Within that constraint, however, Duncan sees substantial room for development. Scheduled maintenance scopes can be unbundled. Third party technicians, optimised vessel logistics, and OEM provided spares can together deliver lower cost outcomes than a single source OEM service wrap. The market is already moving in this direction, particularly for developers willing to invest in their own operational capability. Asset owners with scale can negotiate harder, mutualise vessel and technician resources across nearby projects, and capture more of the operational value chain in-house.

The OEM and Supply Chain View

Philippe cautioned against drawing conclusions from O&M development in the onshore wind sector. Onshore O&M has become a competitive market because the assets are easily accessible, parts are widely available, and a financial investor can plausibly delegate everything. Offshore is different. It is a power plant scale asset where the substation, the array cables, and the wider balance of plant matter as much as the turbine itself and where the cost of a single mobilisation of a major component replacement vessel can affect operating margin in OPEX. Philippe’s prediction is that offshore wind will require “competent owners” — utility scale operators such as Ørsted, RWE, Vattenfall or Iberdrola — pooling vessels and technicians across nearby clusters such as Hornsea, Dogger Bank or East Anglia. The OEM will likely retain a five-year warranty period; beyond that, the competent owner takes the lead.

On the older turbine platforms, including the UK’s substantial base of 3.6 MW turbines, and the 6 MW units now approaching mid-life, service providers tend to limit firm availability or uptime guarantees. The volumes from legacy technologies are sometimes too low to economically support parts and vessels and the major OEMs have no commercial interest in propping up platforms which they will never build again. This creates a real niche for ISPs but on a cannibalisation and best-efforts rather than a guaranteed performance basis. Owners of older turbine fleets may have to allow units to fail one by one, harvest parts from decommissioned sites, and manage the asset down towards the end of its supported life.

What will happen with older wind farms after 25 years — life extension or decommissioning?

The Developer View

Duncan saw a mixed picture. Many of the turbine platforms in the early fleet can run beyond 20 years with the right monitoring, selective replacement, and operational tuning. The wear-out behaviour of well-maintained offshore turbines has, in many cases, proved more forgiving than the original design assumptions implied. However, the binding constraint on life extension is rarely physical condition. It is the capture price, the price the wind farm actually receives for the power it sells, which in a market saturated with wind generation can be substantially below the wholesale average.

An ageing asset that generates during low-price, wind-heavy hours and sits idle during high-price, low-wind periods faces a structural revenue squeeze regardless of its physical condition. Where the CfD has expired and the asset is exposed to the merchant market, the economics become precarious even if the equipment is sound. In Duncan’s view, the realistic outcome is therefore a mix: some assets will be in an economic position to extend their life by five or even ten years with the right ownership and operational support; others will reach a point where component failures cannot be patched or where the operating cost base simply cannot be supported by the market price and decommissioning will follow. The decision will be asset specific rather than industry wide.

The OEM and Supply Chain View

Philippe was more categoric. Fixed bottom offshore wind, he argued, will not see repowering as seen in the onshore sector for technical reasons. Foundations are designed for a specific turbine, and a modern 15 MW machine cannot be placed on a monopile sized for a 10 MW unit. Inter-array cables are voltage matched and layout specific to the original turbine count and cannot be reused for a different deployment. What may be considered for reuse, in some cases, is the offshore substation and the grid connection. On a major project like Dogger Bank, the high voltage DC connection and converter stations cost as much as the entire turbine contract. So, the consented site and the grid connection have genuine residual value. Everything physical above the seabed, however, will most probably be replaced.

The likely approach that emerges is therefore decommissioning followed by re-permitting rather than repowering in any meaningful sense. The older turbine fleet, especially the UK’s substantial 3.6 MW base, will be operated on a best-efforts basis until cumulative outages trigger a decommissioning decision. The consented site will then be re-permitted for a much smaller number of significantly larger turbines on entirely new foundations and arrays. Philippe noted in passing that floating offshore wind offers a genuinely different repowering proposition. A floating asset can in principle be detached, refitted, and redeployed elsewhere, though this is a long-term consideration rather than a near-term reality.

Both speakers agreed that significant decommissioning remains some years away. Early examples, such as the seven-unit Arklow array now going through decommissioning with the twelve-unit Alpha Ventus next, are limited, with the wave of UK 3–4 MW turbine decommissioning a five- to ten-year prospect. Both Duncan and Philippe agreed that this will create a real and substantial market for independent service operation of ageing assets and in the refurbishment market that supports them. The decommissioning itself is not technically challenging as the engineering is well understood from the oil and gas industry.

Quick Fire Questions

To close, we put four quick fire questions to each speaker:

What three things is the industry still underestimating?

Duncan: Grid delivery risk; the years it takes to stand up new industrial capacity – factories, yards, vessels; and the skilled-workforce pipeline.

Philippe: The absence of standardisation in floating wind; the skilled-workforce gap; and grid as the binding bottleneck – permitting, execution and the high-voltage component supply chain.

Offshore wind in the US – positive, neutral, or negative?

Duncan: Negative.

Philippe: Negative – and for structural, not just political, reasons. The constraint is cheap domestic gas, not any single administration.

Will large-scale floating wind be a commercial reality within the decade?

Duncan: A qualified yes. Commercial by 2036 but only in niches where fixed-bottom, onshore wind and solar cannot meet demand and at far lower volumes than the headlines suggest.

Philippe: No. Without convergence on a standardised platform and the volume to industrialise it, a decade is too short.

Would you tell your 25-year-old self to go into offshore wind today?

Duncan: Yes, without hesitation!

Philippe: Not yet. Wait a few years for the reset to play out first – after that, it will be one of the best places to be.

Disclaimer: The views and opinions expressed by the interviewees are solely their own and are based on their personal experiences and perspectives. These views do not necessarily reflect the opinions, positions, or policies of Stout, its affiliates, or its employees. Inclusion of these comments is intended to provide additional perspective and should not be construed as an endorsement by Stout of any particular viewpoint, legal interpretation, policy position, or course of action.