IEA Cuts Offshore Wind Outlook as Costs and Policy Shifts Bite

The global offshore wind industry is experiencing significant challenges despite overall strong growth in renewable capacity worldwide, according to the International Energy Agency’s latest report. While global renewable power capacity is expected to more than double by 2030, the offshore wind sector specifically shows a weaker outlook, with projected growth approximately 25% lower than previous forecasts.

“Offshore wind stands apart, however, with a weaker growth outlook – around a quarter lower than in last year’s report – resulting from policy changes in key markets, supply chain bottlenecks and rising costs,” the IEA notes in its Renewables 2025 annual report.

The report highlights that solar PV will dominate renewable energy expansion, accounting for approximately 80% of the global increase in renewable power capacity over the next five years. This dominance is attributed to solar’s low costs and faster permitting timeframes, while other technologies including wind, hydro, bioenergy, and geothermal will make smaller contributions to the overall growth.

IEA Executive Director Fatih Birol emphasized the importance of addressing emerging challenges: “As renewables’ role in electricity systems rises in many countries, policy makers need to play close attention to supply chain security and grid integration challenges.”

The global renewable power sector faces several headwinds, including supply chain strains, grid integration challenges, financial pressures, and policy shifts. Despite these obstacles, the IEA forecasts global renewable power capacity increasing by 4,600 gigawatts by 2030 – equivalent to adding the combined power generation capacity of China, the European Union, and Japan.

Global supply chains for wind turbine components remain heavily concentrated in China, with the country expected to maintain over 90% market concentration in key production segments through 2030, raising concerns about supply chain security for offshore wind projects worldwide.

While the offshore wind sector struggles, confidence in renewables overall remains strong, with most major developers either maintaining or raising their 2030 deployment targets compared with last year. This suggests that despite current challenges, the long-term outlook for renewable energy, including offshore wind, remains positive.

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