Some 137 substations will be installed offshore continental Europe this decade, requiring $20bn in total investment, a new Rystad Energy report suggests.
Rystad said that over 120 of these facilities will be installed between 2024 and 2030 at a cost of around $18bn. Annual spending on offshore substations will increase steadily through 2030, rising from an average of $1.4bn annually from 2015 to 2023, to a new high of $8.4bn in 2030.
Substations in the offshore wind industry 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 switch gears, transformers and converters, a reactive power compensation system, and an earthing system.
Offshore substations are beneficial for projects over 200MW in capacity and located more than 15 km from shore, as they help minimize power transmission losses. They can also be used for electrifying offshore oil and gas production platforms.
Rystad stated that the surge in substation developments was being fuelled by the increased scale of offshore wind projects and their distance from shore, with projects exceeding 1GW of capacity requiring multiple substations.
Europe is set to install eight new offshore substations in 2024 alone, double last year’s number. This year, new offshore substations will be confined to wind projects located within 50 km of the coast. However, in the latter half of the decade, Rystad expects a notable uptick in offshore wind installations beyond the 50-km mark, driving more need for offshore substations.
“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 the shore, meaning we could see the first floating substations in the early 2030s,” said Petra Manuel, senior offshore wind analyst at Rystad Energy.
Offshore substations are composed of the topside, topside housing, and the foundation, which holds the weight of the topside structure. Jackets have been the preferred foundation concept for most offshore substations since they can support wider and larger structures. However, some projects have also used monopiles driven directly into the seabed.
Of the nearly 100 offshore substations installed in Europe between 2014 and 2016, jackets held almost a 70% share, with monopiles accounting for less than a quarter. Some of the substation foundation concepts to be used in 2025 and 2026 are not yet known, so Rystad notes them as unspecified in our research.
