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The global acceleration of offshore wind installations is catalyzing a significant increase in the need for offshore substations, particularly in Europe. According to Rystad Energy’s latest research and modelling, 137 offshore substations are expected to be installed across continental Europe by the end of this decade, demanding a total investment of $20 billion. Of these, over 120 installations will occur between 2024 and 2030, at an estimated cost of $18 billion.
Substations play a critical role in the offshore wind industry by collecting power generated by wind turbines, increasing the operating voltage, and transmitting the power to shore. These facilities are essential for projects exceeding 200 megawatts (MW) in capacity and are located more than 15 kilometers (km) from shore, as they help minimize power transmission losses. Additionally, offshore substations are beneficial for other energy initiatives, such as electrifying offshore oil and gas production platforms.
“The surge in substation developments is being driven by the increased scale of offshore wind projects and their distance from shore,” stated Petra Manuel, Senior Offshore Wind Analyst at Rystad Energy. “Projects exceeding 1 gigawatt (GW) of capacity often require multiple substations.”
Many European countries have set ambitious offshore wind installation targets, transforming the continent into a hub for substation activity. Europe is set to install eight new offshore substations in 2024 alone, doubling the number from last year. Initially, these new substations will be confined to wind projects located within 50 km of the coast. However, in the latter half of this decade, there will be a significant uptick in offshore wind installations beyond the 50-km mark, necessitating more offshore substations.
Annual spending on offshore substations is projected to increase steadily through 2030. The average expenditure, which stood at $1.4 billion per year from 2015 to 2023, is expected to reach a peak of $8.4 billion in 2030. This growth in investment is not only linked to the rising installed capacity in Europe but will also be amplified by the advent of floating wind technology. Floating wind turbines, situated far from shore, could lead to the first floating substations emerging in the early 2030s.
Offshore substations consist of two main components: the topside, which contains the primary electrical power system, auxiliary systems, and housing, and the foundation, which supports the topside structure. Jackets, fixed to the seabed with piles at each leg, have been the preferred foundation for most offshore substations due to their ability to support larger structures. However, some projects have utilized monopiles driven directly into the seabed.
Between 2014 and 2016, nearly 100 offshore substations were installed in Europe, with jackets holding a 70% share and monopiles accounting for less than a quarter. The foundation concepts for some of the substations planned for 2025 and 2026 remain unspecified, indicating ongoing developments in the technology.
The offshore substation market is poised for substantial growth this decade, driven by the expanding capacity of offshore wind projects in Europe. As floating wind technology advances, the industry will likely see even more innovative solutions to meet the growing demand for reliable and efficient power transmission infrastructure.
