Europe is gearing up for a significant investment of $20 billion in offshore substations over the next decade to bolster the rapidly expanding offshore wind sector. These substations play a critical role in gathering and transmitting power generated by offshore wind turbines to the mainland. As the offshore wind industry gains momentum globally, the demand for reliable infrastructure to transfer this power efficiently to the electricity grid is skyrocketing, particularly in Europe.
Research conducted by Rystad Energy indicates that around 137 substations are slated for installation off continental Europe by 2030, necessitating a total investment of $20 billion. A substantial portion of these installations, approximately 120 substations, is anticipated to be completed between 2024 and 2030, with an estimated expenditure of $18 billion. This surge in investment reflects a growing trend, with annual spending on offshore substations projected to rise from an average of $1.4 billion per year during 2015-2023 to a significant high of $8.4 billion by 2030.
Offshore substations are indispensable components of offshore wind projects, facilitating the aggregation and transmission of power from wind turbines to shore. These substations feature essential elements like switchgears, transformers/converters, reactive power compensation systems, and earthing systems. Particularly beneficial for large-scale projects exceeding 200 megawatts (MW) and situated more than 15 kilometers from shore, they help minimize transmission losses, making them crucial for efficient energy transmission.
The surge in substation developments is spurred by the increasing scale of offshore wind projects and their distance from shore, necessitating multiple substations for projects exceeding 1 gigawatt (GW) of capacity. European nations are driving this momentum, with ambitious offshore wind installation targets that aim to position the continent as a key hub for substation activities. In 2024 alone, Europe is slated to install eight new offshore substations, doubling last year’s installations. Although initial installations in 2024 will be within 50 kilometers of the coast, a notable uptick in offshore wind installations beyond the 50-km mark is expected in the latter half of the decade, further fueling the demand for offshore substations.
The offshore substation market is expected to witness a substantial spending increase in tandem with the growing installed capacity in Europe, with additional impetus anticipated from the emergence of floating wind technology. Floating wind turbines, situated farther offshore, are expected to drive the adoption of floating substations, with projections indicating the potential for their introduction in the early 2030s.
Offshore substations typically comprise two key sub-components: the topside, housing the main electrical power system, auxiliary systems, and the topside structure; and the foundation, supporting the topside’s weight. While jackets, fixed to the seabed with piles, have been the preferred foundation for most substations due to their ability to support larger structures, some projects have also utilized monopiles driven directly into the seabed.
The topside of an offshore substation can be substantial in terms of size and weight compared to a wind turbine. Historical data from 2014 to 2016 indicates that jackets accounted for nearly 70% of the nearly 100 offshore substations installed in Europe during that period, with monopiles comprising less than a quarter. However, the foundation concepts for substations in 2025 and 2026 are yet to be determined, categorized as unspecified in ongoing research.