Stout recently attended the Offshore Wind Journal Conference 2026 conference, where industry participants discussed the key challenges and opportunities facing the sector. Key issues were debated, which we have summarised in this report.

European Offshore Wind Development: A Bump in the Road or an Industry in Trouble?

Growth in offshore wind projects in Europe stalled during 2023-2025, with a number of auctions for new capacity receiving no bids. Whether this is a bump in the road of relentless growth of offshore wind or a fundamental change in the rate of capacity expansion has significant implications for the entire offshore wind supply chain, from vessel providers to construction and O&M contractors.

There was agreement that, following 10 years of LCOE falling through ever larger turbines and economies of scale, the direction of change in LCOE has turned up as a result of a 40% increase in capex cost, a higher interest environment driving WACC up by 2.75%, and a 20% increase in operating expenses.¹ Where previously large utilities and O&G companies could rely on stable or decreasing LCOE and felt comfortable taking long-term electricity market price risk, during 2023-2025 the increase in LCOE, decreasing electricity prices, and increased volatility and intermittency risk eroded projected returns. As a result, no bids were received for auctions with low or no revenue support, such as in the UK in 2023, Denmark in 2024, and the Netherlands and Germany in 2025.

Against this negative backdrop, what does the future look like? Governments across Northern Europe realise that offshore wind is a key tool to achieving their goals, as it provides energy security in an increasingly unstable geopolitical environment, it can be scaled quickly at a time when energy demand is booming, it is politically less sensitive than onshore renewables, and it is a key component in achieving net zero goals.

Governments’ need for offshore wind capacity to continue to grow is forcing them to realise that risk mitigation for developers is required and currently only governments can provide this. Recent announcements such as the North Seas Energy Cooperation group of countries commitment to build 15 GW per annum of offshore power from 2031 to 2040 underpins the positive outlook for the sector and there is a reassessment of what governments need to do to best achieve this, with the latest UK AR7 auction seen as a success.

UK AR7 Auction: A Template for Other Governments?

AR7 awarded Europe’s largest offshore wind capacity of 8.2 GW fixed bottom plus 192 MW floating using a two-sided, indexed CfD structure that materially improves revenue visibility for lenders and long-term capital. What came through clearly at the conference was that revenue certainty rather than headline strike price is now the central issue. This was demonstrated by the failure of recent European tenders that relied on “negative bidding” or merchant-style risk transfer and there is broad recognition that developers cannot absorb wholesale price risk, supply chain volatility, and financing pressure simultaneously.

With corporate PPA demand at the price levels required to underpin investment decisions limited, regulators remain the only logical counterparties to provide revenue certainty without slowing deployment. In that context, AR7 is less about price and more about restoring investability through scale and structured risk-sharing. CfDs are not a subsidiary but a two-sided hedging mechanism with support for the wind farm if electricity prices are below the strike price and payments to the government if prices are above the strike price. The prevailing view was not that support needs to increase but that risk needs to be allocated more rationally. AR7 therefore feels less like an exception and more like a potential template to support financeable growth.

Floating Offshore Wind: Ambition Versus Readiness

Floating wind is currently less than 1% of installed capacity with no commercial installations today. However, some conference speakers expressed optimism for the floating wind market, with one quoting expectations of it reaching ~20% of installed capacity by 2050. The strategic rationale is well understood: floating unlocks deep-water sites and stronger wind resources, particularly relevant for markets such as the UK, France, and Korea where fixed-bottom expansion is increasingly constrained.

However, the market remains fragmented, with numerous foundation concepts in development and no clear standard emerging. Industrialisation, port readiness, and certification frameworks are still evolving and the materially higher CfD strike prices relative to fixed-bottom reflect the execution risk that remains embedded in the technology. The opportunity is not in question; rather, the timeline and path to repeatability are. For capital providers, the growth narrative is compelling but standardisation and demonstrated cost compression will ultimately determine the pace of deployment.

C/SOVs: An Oversupplied Market?

Discussion at the conference covered potential oversupply in the C/SOV market with broad acknowledgement of the wave of newbuilds reaching the market during 2024-2026. To date, charter rates have remained surprisingly firm, supported by delays in vessel delivery, longer construction periods for arrays, and a higher number of vessels required than forecast. As a result, capacity is nearly sold out for the 2026 season. The emergence of demand in the O&G sector was also having an impact, as O&G operators are realising that the C/SOV is highly functional accommodation vessel, particularly for servicing FPSOs. Whilst this demand has been more in Brazil and Asia, it is removing capacity from the North Sea market, which is helping the supply demand balance.

Nevertheless, concern remains around charter rates in 2027 and beyond, as they will particularly impact owners that ordered vessels more recently at elevated yard prices. There was a warning that the biggest risk to the C/SOV sector is optimistic, hockey-stick forecasts for offshore wind capacity growth that will encourage speculative newbuild ordering. On the positive side, it was felt that C/SOV designs were standardising and that vessels would not be obsolete at the end of a long-term contract but would undergo a refit and upgrade before returning to the market.

CTVs: Will New Designs Transform the Sector?

Chartwell spoke about new vessel designs and the benefits of hybrid CTVs. They estimate that over 25% of the time CTVs are idle and savings can be made by utilising batteries to reduce combustion engine hours and fuel consumption. However, despite significant idle time in offshore operations, customers remain highly cost-driven and unwilling to pay for new designs without a demonstrable increase in performance — most notably increased time on turbine. Alternative fuels were discussed, but the opinion was that charterers appear unwilling to pay for alternative fuel capable vessels unless they are cost competitive with conventional fuels vessels, so the near-term future of the industry will be based on existing CTV designs.

Vessel owners appear to be favouring SWATH or semi-SWATH designs which can materially improve workability in higher sea states — and therefore time on turbine — and have historically been able to command a higher day rate. However, for some operators, the higher capex is difficult to justify.

While AR7 underpins future O&M demand, the continued scaling of turbine size potentially reduces the number of turbines required per project, raising questions as to whether installed capacity growth will convert proportionally into offshore days. As projects move further offshore, logistics requirements may evolve but the near-term focus remains on reliability, utilisation and disciplined capital deployment.

Conclusions

Based on our attendance at the conference, the view that offshore wind growth has hit a bump rather than experienced a more fundamental downgrade is backed up by industry participants. Governments will continue to support offshore wind development as a key component of powering the future economy and with the right risk mitigation — most probably through a CfD structure — developers will continue to invest. There are, no doubt, challenges like supply chain resources, manpower, and grid capacity, but these can be overcome.

From an offshore vessel perspective, the recent wave of newbuild deliveries has been accommodated by the market, but there is a risk that supply exceeds demand, particularly if asset-focused investors become overexuberant in light of a more positive view of offshore wind capacity expansion.

1. Green Girafe Advisory