Why is offshore wind so expensive?

Because the cost is not in the turbine but in getting it into the sea: foundations, subsea cables and installation — the 'balance of system' — routinely account for more than 50% of an offshore project budget. Fixed-bottom offshore wind therefore runs at USD 80–120/MWh against USD 30–50/MWh onshore, and floating offshore wind currently costs two to three times as much again as fixed-bottom.

The marine environment is unforgiving. Steel structures must survive 25 years of saltwater corrosion and the hammering of once-in-a-century storms. Installing a turbine in the middle of the North Sea requires a fleet of specialised wind turbine installation vessels (WTIVs), which extend legs to the seabed and jack the entire ship 30 metres out of the water to create a stationary platform capable of lifting 2,500-tonne components. Fewer than 50 such vessels worldwide can currently handle the latest 15 MW machines, and day rates can exceed USD 250,000. Miss the vessel window by a single week and the winter storm season closes the sea, pushing a project back a full year. The scarce resource offshore is neither land nor steel — it is ships.

Distance adds further cost. The Dogger Bank project in the North Sea is being built in three 1.2 GW phases using GE Haliade-X 13 MW and 14 MW machines, and because it sits 130 km from shore it must use high voltage direct current (HVDC) transmission to bring power back with minimal losses. The next step, floating offshore wind, is dearer still: most of the world's best wind resource lies in water deeper than 60 metres, where driving steel piles is impractical or prohibitively costly, so turbines ride on large submerged platforms held by mooring systems. Floating wind still costs two to three times fixed-bottom, though history suggests it will descend the same learning curve.

The supply chain is a third cost layer. A single turbine needs thousands of tonnes of steel, copper and specialised resins plus hundreds of kilograms of rare earths — notably the neodymium in direct-drive permanent magnets, where over 90% of global magnet production sits in China, prompting Western governments to designate them critical minerals. Transport is the most immediate physical constraint: once a blade reaches 100 metres it will not pass an ordinary bend or standard highway bridge, requiring superload trailers that straddle two lanes, months of permitting, and the temporary removal of road signs and traffic lights. This is why the industry is shifting to quayside manufacturing — for offshore projects, factories are built at the dock so blades go straight onto a vessel and never touch a road.

Finally there is financial structure. Wind projects are capital-heavy and operations-light: 80% of lifetime cost is incurred before the first blade turns, which makes the industry acutely sensitive to interest rates. When global rates rose in 2022–2023, project costs could jump 20%–30%, triggering a wave of high-profile cancellations. It also explains why power purchase agreements (PPAs) are the financial bedrock of the sector — without a 20-year fixed-price offtake contract, a project is effectively unbankable to major institutional lenders. Against these costs, offshore wind offers far higher capacity factors than onshore (45%–55%+ versus 30%–35%) and sits close to coastal megacities, bypassing long onshore transmission lines that are hard to permit. Global offshore capacity passed 89 GW by the end of 2025, more than double the 2022 level.

The logistics are so complex that balance-of-system costs — foundations, cables and installation — often account for more than 50% of an offshore project's budget.

This question is covered in depth in The Full Spectrum Every Energy Source Explained — A Singapore Perspective，第八章 8.4 / 8.6 / 8.7