European Offshore Wind Substations to Require USD 20 Billion Investment by 2030, Rystad Energy Says

June 19, 2024, by Adnan Memija

According to a recent report from Rystad Energy, continental Europe will see the installation of 137 offshore substations over the coming decade, with an estimated total investment of USD 20 billion (approximately EUR 18.6 billion).

According to the report, over 120 substations will be installed between 2024 and 2030 at a cost of around USD 18 billion. Annual spending on offshore substations will increase steadily through 2030, rising from an average of USD 1.4 billion per year from 2015 to 2023, to a new high of USD 8.4 billion in 2030, said Rystad Energy.

Substations are crucial in the offshore wind industry as they collect power generated by wind turbines, increase the operating voltage, and transmit the power to shore. The primary electrical system of an offshore substation includes switchgears, transformers/converters, a reactive power compensation system, and an earthing system.

Offshore substations are particularly beneficial for projects over 200 MW in capacity and located more than 15 kilometres from shore, as they help minimise power transmission losses, according to Rystad Energy. They are also valuable for other energy initiatives, such as electrifying offshore oil and gas production platforms, said the company.

“We will see a substantial increase in spending in the offshore substation market this decade. This is linked to growing installed capacity in Europe and will be further amplified when floating wind technology takes off. Floating wind turbines are situated far from shore, meaning we could see the first floating substations in the early 2030s,” said Petra Manuel, Senior Offshore Wind Analyst, Rystad Energy.

According to the company, the surge in substation developments is being fueled by the increased scale of offshore wind projects and their distance from shore, with projects exceeding 1 GW of capacity requiring multiple substations.

Europe is planning to install eight new offshore substations in 2024 alone, double last year’s number. This year, new offshore wind substations will be confined to wind projects located within 50 kilometres of the coast, but in the latter half of this decade, Rystad expects a notable uptick in installations beyond the 50-kilometre mark.

Offshore substations can be divided into two sub-components: the topside, which contains the main electrical power system, auxiliary systems, and the topside housing; and the foundation, which holds the weight of the topside structure.

Of the nearly 100 offshore substations installed in Europe between 2014 and 2016, jackets held an almost 70 per cent share, with monopiles accounting for less than a quarter, according to the report.

Some of the substation foundation concepts to be used in 2025 and 2026 are not yet known, so Rystad noted them as unspecified in their research.