Offshore wind has had better weeks than the last seven days, with Vattenfall shelving a giant project in the UK North Sea and Iberdrola-owned Avangrid agreeing to pay almost $50m to terminate a power deal for a pioneering US development that it says is no longer viable.

For years offshore wind’s swelling ambitions have been a reliable shot of good news for the energy transition – there was some of that in the last week too, as the US announced first leasing in the Gulf of Mexico – but nobody can now deny that storm clouds are gathering.

The Global Offshore Wind Alliance launched at the COP27 climate summit set an ambition to have 380GW of wind at sea in place by 2030, up from 64GW by the end of 2022, and deploy a massive 70GW annually in the next decade of an energy source seen as essential to the world's green transition that's regularly hailed for its potential to deliver nuclear-scale zero-carbon power with none of the safety risks.

The sector faces big challenges to achieving those lofty goals – here are five of the steepest:

Soaring costs

Cost inflation has punched a giant hole in the business cases of some of the world’s largest offshore wind projects. Vattenfall said costs have spiked by up to 40%, described by its CEO as "a perfect storm", as it revealed it would shelve its gigascale Norfolk Boreas development off eastern England, which won a power deal from the UK government just last year. In the US, the likes of Iberdrola, BP with partner Equinor, Ocean Winds and Orsted have all told the authorities their pioneering northeast coast projects face a viability gap.

Permission to build

Getting an offshore wind project consented still takes far too long in most markets. Some of the UK’s biggest projects have taken a decade to move from being awarded seabed rights to start of construction. US lawmakers in March warned the Department of the Interior that “delays – whether due to a slow and under-resourced process or adverse court decisions resulting from quick and shoddy reviews – will hamper, and possibly lead to a death knell, for project development”.

Opposition

Whether it’s coastal residents in eastern England furious over the impact of onshore transmission works, controversy over whale deaths in the US – amid dark suspicions over the involvement of fossil fuel-funded interests in misinformation campaigns – or fishing fleets anxious about their livelihood, some of the world’s pioneering offshore wind projects are finding themselves the target of legal challenges, protests and political scrutiny just when the industry is looking for a clear runway to build already challenging developments.

Cooling oil giants

As recently as two years ago, many of the world’s oil & gas majors could hardly contain their enthusiasm for offshore wind. Their deep pockets looked set to be a valuable new source of capital as the industry set out on its painstaking and expensive mission to connect untold gigawatts to grid networks around the world. Fast forward to the present day and Big Oil’s love affair with wind at sea is more nuanced, with several making clear they will only look at projects that fit in with a wider ‘integrated energy strategy’ and players such as Shell seeing star names from the sector heading for the exit door.

Cash-strapped turbine-makers

Big offshore wind farms need big turbines. Exactly how big, and whether the manufacturers that developers are counting on to supply them are in a fit state to do so, are among the industry’s hottest issues. All three of the west’s key offshore wind turbine groups – Siemens Gamesa, Vestas and GE – were loss-making last year and questions have been raised over their ability to scale-up their operations to the level needed, especially as governments continue to flip-flop on policies that would provide long-term volume visibility. That leaves the question hanging – could Chinese turbines fill the gap?

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