By Olivier Mette, Xodus
Floating wind is still earning its place in the modern energy mix. For years it was confined predominantly to academia, viewed by many as too expensive and too engineeringly challenged to stand on its own two feet as a viable renewable energy source.
While there are still only a handful of floating turbines installed globally, it is a sector that is not short on ambition, with almost 300 GW in the pipeline across the world.
Progressing that pipeline and maturing the technology at the pace requires the right ecosystem, one that is shaped by well-designed policy, patient capital technical maturity and strategic coordination.
More volume but higher scrutiny on CfDs
The UK’s Allocation Round 6 (AR6) marked a significant reset after the disappointments of AR5. With 3.4 GW of offshore wind contracts awarded and more flexible strike prices enabling better participation, there’s a renewed sense of momentum. But for floating wind, the real test is just beginning.
AR7, the parameters of which were released in July, gave greater focus to floating wind with several policy changes aimed at supporting the sector, including the extension of phasing and the inclusion of Test & Demonstration scale projects.
That’s promising in theory, but in practice, CfD success will hinge on how developers present and de-risk their projects ahead of bidding. In a world where execution risk trumps ambition, only the most investable projects will survive the competitive squeeze.
Caution still the prevailing mood in the room
Despite strong long-term confidence in floating wind, investor appetite today remains cautious. This is largely because the true commercial scaling of floating wind is unlikely to occur until after 2030, as deployment delays continue to push timelines out. For early-stage projects, this means capital must be deployed ahead of certainty, a tough sell in a risk-averse environment.
There’s no doubt that costs will come down as floating wind scales globally, but our simulation reaffirmed a reality many are grappling with: those cost reductions will take time and may not materialize in time for current project pipelines. That puts immense pressure on early developers to close the gap through clever structuring, strong partnerships and aggressive procurement strategies.
Bankability hinges on supply chain commitment
Bankability is increasingly tied to early supply chain alignment. Clear commitments from OEMs and Tier 1 suppliers, particularly in areas like floating foundations, moorings and electrical integration projects, are needed to engage with investors and lenders. The right contractual structures and risk-sharing mechanisms will be key to unlocking confidence.
With European fabrication and assembly capacity stretched thin, there is growing interest in international OEMs, including Chinese manufacturers, to plug the gap.
While this opens up new options, it also introduces fresh layers of complexity, from political risk to quality assurance and logistics, and as floating wind globalizes, managing these cross-border risks will become a central concern.
Advanced, early-stage, stepping stone developments—capable of providing valuable understandings into technical, regulatory and commercial challenges—will be key for derisking and manage new interface risks. In the UK, this will be driven by projects like Salamander, a joint initiative by Odfjell Oceanwind, Simply Blue Group and Subsea7, that will help to build a foundation for the wider rollout of the sector.
Phasing could hold the key
One solution is the potential for phased project delivery, particularly for gigawatt-scale developments, an approach backed by the latest CfD policy changes.
By breaking a project into multiple stages, developers can manage risk more effectively, demonstrate delivery capability early and unlock incremental financing. It’s a structure that appeals to both lenders and equity investors.
Ultimately, the real challenge is managing risk, not avoiding it. Risk is the deciding factor, but it’s also part and parcel of capital-intensive activities. What separates a promising project from a bankable one is how well that risk is understood, allocated and mitigated.
Investors aren’t just buying into kilowatts, they’re backing execution capability. The ability to navigate regulatory uncertainty, align the supply chain, build a defensible financial model and present a credible delivery plan is what tips the balance.
