Key facts
- Europe's offshore wind monopile market faces weak factory utilization due to project delays and slower investment.
- European manufacturers have invested in capacity for XXL foundations, but demand is lagging.
- Rystad Energy projects European XXL+ monopile capacity to reach 2.7 million tonnes by 2027, with utilization falling to 19% in 2028.
- European monopile manufacturing costs have increased by 38% since March 2020, while selling prices have declined.
- The modeled European supplier margin for a 1.6-kilotonne monopile has dropped to $0.20 million from $0.93 million.
- Chinese suppliers, with significantly lower manufacturing costs, are increasingly competing for European projects.
Europe's offshore wind sector is experiencing a significant shift from a period of high demand and tight manufacturing capacity to one of oversupply. Heavy investment in larger facilities capable of producing XXL foundations for the latest generation of turbines has outpaced the arrival of new projects due to delays and slower investment decisions. Rystad Energy forecasts that European XXL+ monopile manufacturing capacity will more than double from approximately 1.2 million tonnes in 2024 to 2.7 million tonnes by 2027. However, factory utilization is projected to remain low, hitting around 32% in 2026 and 2027 before dropping to 19% in 2028. Loading is expected to improve later in the decade, reaching close to 50% by 2031 under the current project pipeline. This overcapacity is impacting contract economics. The cost of manufacturing a representative monopile in Europe has risen by 38% since March 2020, with modeled costs increasing from $2.50 million to $3.46 million per kilotonne. Simultaneously, selling prices have fallen from their 2022 peak as suppliers compete for limited orders. The modeled European supplier margin for a 1.6-kilotonne monopile has consequently shrunk from about $0.93 million in 2024 to approximately $0.20 million today, representing roughly 3% of the selling price. Chinese suppliers, with manufacturing costs estimated at $2.03 million per kilotonne (about 41% below European reference costs), are now in a stronger position to compete for European projects. Even after accounting for ocean freight and the EU Carbon Border Adjustment Mechanism, a Chinese monopile can be landed in Europe for an estimated $6.35 million, compared to a modeled European selling price of $6.69 million for a comparable monopile. While European manufacturers like Sif (31% of contracted tonnage) and EEW (22%) still dominate the market, the competitive landscape has changed. Developers can more easily split monopile orders between suppliers, introducing more manufacturers into tenders. The long-term risk for European suppliers is that persistent low utilization could lead to deferred investments, mothballed production lines, or outright capacity removal from the market.