Despite the US’s push to decouple from Chinese supply chains and bolster domestic oil and gas, the offshore wind industry is battling significant economic headwinds, including stop-work orders, reduced tax breaks, and soaring inflation.
However, global offshore wind capacity is projected to hit 16 gigawatts by the end of 2025, largely driven by projects already in progress, with China developing two-thirds of these, according to Rystad Energy.
Rystad Energy forecasts that by 2030, China will dominate the global offshore wind market, accounting for 45% of the world’s cumulative capacity.
This makes it challenging for the US market to compete long-term, even with policy changes.
China dominance
“It is now clear that the energy policy shift in the US not only halts or slows progress on offshore wind projects that were previously greenlit but pushes European wind developers away from US investment,” Alexander Fløtre, senior vice president and head of offshore wind research, Rystad Energy, said in the press release.
The US-China supply chain may be decoupled, but China’s position as a global renewables leader may have only been strengthened because of it.
Already, clear trends are noticeable, according to the Norway-based energy intelligence company.
In 2025, US renewable energy investments have seen a 36% year-on-year decrease. Conversely, European investments are growing as companies shift their capital away from the US.
Source: Rystad Energy
European shift
Stop-work orders were issued for both Orsted’s Rhode Island offshore wind development and Equinor’s New York project.
However, the ban on Equinor’s project was lifted after a deal was reached with the administration.
A federal judge has overturned the order on Orsted’s Revolution project, leaving the possibility of further legal challenges uncertain.
“To remain attractive to investors, Orsted and companies like it must evaluate all options for offshore wind developments and their overall US presence,” Rystad said.
Conversely, CNOOC, a Chinese company, announced its plans to expand its offshore wind power holdings.
A significant undertaking in this expansion is the 1.5 GW Hainan CZ7 project, slated for commissioning prior to 2030. This project has received approval and will mark CNOOC’s initial utility-scale venture.
Additionally, European energy companies with limited exposure to the US will increase their dependence on China and other nations, Rystad said.
With Western original equipment manufacturers (OEMs) returning to China’s attractive business environment after their 2020 departure, the likelihood of establishing an alternative, renewables-powered supply chain to rival China is slim, the agency added.
Supply chain challenges
A significant challenge arises from the fact that roughly 25% of the manufacturing sites responsible for key components used by Western original equipment manufacturers (OEMs) for turbine platforms with IEC-type certification in Europe are located in China.
Source: Rystad Energy
“Europe’s wind industry has taken notice, and policymakers are mobilizing to help reduce the reliance on Chinese imports and beef up the domestic wind energy supply chain,” Andrea Scassola, vice president of supply chain research at Rystad Energy, said in the release.
“Officials hope such measures will encourage manufacturing buildouts while keeping costs in check.
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