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Offshore wind (OSW) has been championed worldwide as a cornerstone of the clean-energy transition. Governments, developers, and environmental advocates touted it as a means to generate vast amounts of renewable electricity while reducing carbon emissions and fossil fuel dependence.
Yet, recent developments across Asia, Europe, North America, and Australia suggest that offshore wind’s global rollout is encountering profound obstacles — from commercial viability and policy reversals to ecological impacts and rising energy costs.
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6 reasons OSW is struggling worldwide
Despite the excitement and investments that once surrounded offshore wind, the reality on the ground is proving more complicated. Projects that promised abundant, low-carbon energy are now facing a mix of financial, technical, and environmental hurdles.
Commercial viability under pressure
Across several continents, major developers have withdrawn from or scaled back OSW projects, citing financial and market challenges.
In Australia’s emerging OSW market, multiple high-profile projects have collapsed. Spanish developer BlueFloat Energy scrapped its $10 billion Gippsland Dawn project, with its principal shareholder concluding that the sector is no longer commercially viable. The move takes place during a period of uncertainty in the energy market.
That decision was followed by other abandonments, including top energy firm AGL pulling out of the Gippsland Skies project — the third OSW cancellation in Victoria’s designated wind zone. These exits suggest serious investor hesitation and market weakness, even in jurisdictions with significant wind potential.
Japan also faced setbacks, with Mitsubishi abandoning three OSW projects, underscoring that cost and investment risk are global issues.
Meanwhile, Germany scaled back the capacity for its 2026 offshore wind tender after its latest auction failed to attract a single bid. Parliament approved reducing the planned auction to 2.5 to 5 gigawatts (GW), far below the 10 GW offered in August. Developers are hesitant to take on riskier projects amid rising costs and supply chain challenges, prompting calls for a complete overhaul of Germany’s renewable energy auction framework.
Policy shifts & political backlash
Government support is critical to long-term renewable infrastructure. Yet political recalibrations have shaken offshore wind momentum, particularly in the US.
Former U.S. President Donald Trump’s administration took actions that dramatically affected OSW prospects: a massive project in Rhode Island was halted on national security grounds, sending major developers’ stock prices tumbling.
“Americans deserve energy that is affordable, reliable, and built to last — not experimental and expensive wind projects that are proven failures,” declared Department of Interior Deputy Press Secretary Aubrie Spady, adding that the department is taking immediate action tohalt these projects, aiming to ensure a stronger energy future and lower costs for American families.
These political headwinds compound commercial and regulatory uncertainty, creating a climate where cautious investors reconsider long-term commitments.
Australian developers have also navigated uncertainty tied to regulatory changes and shifting approvals regimes, including federal government rejections and legal challenges that sank projects like the Seadragon OSW farm proposal.
Regulatory & auction price challenges
Even where governments remain committed to OSW, setting workable frameworks for project development has proven complex.
In the Philippines, the Energy Regulatory Commission (ERC) has set a preliminary ceiling price of ₱10.3859 per kilowatt‑hour (kWh) for fixed‑bottom OSW projects under the fifth Green Energy Auction (GEA‑5), a key step toward the nation’s first OSW auction planned for delivery between 2028 and 2030. This draft price, the highest among renewable auction reserve ceilings in the country, will serve as a price cap during bidding and is currently open for public consultation before a final decision this January 2026.
GEA‑5 was moved to 2026 after delays tied to the late release of the Notice of Auction and Terms of Reference, which outline the rules and pricing mechanisms developers need before bidding can proceed.
In other markets, pricing and auction design have clearly influenced participation and timing. For example, in the Netherlands, capacity targets were downsized, and past tenders failed to draw bids in part because of auction conditions and lack of financial guarantees under certain frameworks, illustrating how pricing risk can stall development.
Rising costs & consumer impact
OSW’s high capital and operating costs are not just investor concerns — they may also be influencing electricity pricing debates in some regions. They generally have much higher installed capacity costs compared with onshore wind, primarily because of the added complexities of foundations, subsea grid connections, and specialized installation requirements.
Estimates of OSW capital costs often range roughly €1.3 million to €2.5 million ($1.51 million-$2.90 million) per MW, compared with about €1.1 million to €1.4 million ($1.28 million-$1.63 million) per MW for onshore wind, reflecting higher expenditures for offshore infrastructure and construction.
The Energy Regulatory Commission (ERC) reports that offshore wind in the Philippines could cost around ₱14 per kWh, nearly three times higher than some solar power purchase agreements, which have been signed at roughly ₱4.50 per kWh. Analysts and journalists have criticized this steep price difference.
Rappler’s Val Villanueva warned that households will face higher generation charges, system fees, and grid connection costs because of OSW. “Filipinos already face among the highest electricity rates in Asia,” emphasized Villanueva. “Careless OSW timing can push that burden even higher. This is the price impact that households cannot afford — and one that government can still avert.”
(Also read: Visayas Faces Power Crunch in 2026: Economy, Jobs, and Daily Life at Stake)
Ecological & environmental controversies
While OSW is marketed as an environmentally friendly energy source, emerging analyses suggest the ecological impacts may be more severe than initially understood.
Studies indicate that OSW installations can alter marine ecosystems, affecting seabed habitats, fish behavior, and bird migration patterns. One analysis found that ecological disturbances from Atlantic wind farms could be more significant than expected, challenging early assumptions about minimal environmental disruption.
Moreover, the Philippines still lacks marine spatial planning (MSP) for its future OSW developments. MSP helps allocate ocean space among competing uses like fishing, shipping, conservation, coastal communities, and OSW. By clearly designating zones for wind farms, MSP reduces conflicts and makes project siting more predictable.
Without an effective MSP, Philippine waters could become hazardous. Turbines near busy shipping lanes or fishing areas could increase the risk of collisions with cargo ships, fishing vessels, or recreational boats. These dangers threaten safety, disrupt livelihoods, and could drive up insurance costs for maritime and tourism sectors.
Health & livelihood concerns
Beyond ecology, some public figures and commentators have raised potential health concerns related to offshore wind turbines.
In the US, political figures like Robert F. Kennedy Jr. have questioned whether OSW could pose risks to human health in nearby communities, prompting investigations and broader public debate.
According to a Green Oceans report, offshore wind turbine blades can degrade over time, releasing harmful contaminants into the marine environment. When blades fail, they may scatter tons of materials such as PVC foam, epoxy resins, styrene, formaldehyde, and phthalates into the ocean. These substances are linked to potential health risks, including cancer, endocrine disruption, and immune system effects.
In the Philippines, national fisherfolk groups have protested plans for the proposed 2,000‑MW BuhaWind Offshore Wind Farm in Ilocos Norte, warning that exclusion zones around turbines could displace more than 6,000 registered fishers and severely restrict access to traditional fishing grounds, threatening income and food security for small‑scale fishers.
Global slowdown signals & a cautious PH path forward
Recent global developments suggest that offshore wind, once a marquee renewable technology, is facing retrenchment pressures in multiple markets. A leading industry forecast has cut its 2030 global capacity outlook by nearly28 % outside China due to stalled auctions, delayed investment decisions, and canceled offtake contracts, underscoring economic and policy uncertainty facing the sector worldwide.
Activity in 2025 has dropped sharply, with new site awards totaling just 17.2 GW, a 78 % decline from the 75 GW annual average seen between 2022 and 2024. The slowdown hit Europe hardest, while floating wind made up 5.5 GW of the awarded capacity, cutting demand for surveys and related developer services.
For the Philippines, these global warning signs matter. The country already contends with some of the highest electricity prices in Southeast Asia, placing a heavy burden on households and industry alike, and many consumers struggle with energy costs that take up a significant share of income.
Pursuing costly OSW development without robust economic safeguards could further strain consumers and small businesses, many of whom are still building resilience and climbing out of poverty.
A prudent energy strategy would prioritize affordable, reliable power and economic growth first, while closely monitoring international OSW trends before committing to large‑scale investments that may magnify existing cost pressures.
Sources:
https://www.abc.net.au/news/2025-12-05/third-victorian-offshore-wind-project-abandoned/106108856
https://dailycaller.com/2025/08/22/exclusive-trump-admin-kills-massive-offshore-wind-project
https://www.abc.net.au/news/2025-03-04/seadragon-offshore-wind-farm-application-rejected/104909234
https://mb.com.ph/2025/12/15/erc-sets-1039-per-kwh-price-cap-for-offshore-wind-auction
https://www.bworldonline.com/economy/2025/11/25/714575/offshore-wind-auction-now-set-for-next-year/
https://www.sciencedirect.com/topics/earth-and-planetary-sciences/offshore-wind-power
https://mb.com.ph/2025/12/08/who-wants-to-pay-14kwh-for-offshore-wind
https://solaren-power.com/solar-energy-philippines-future-of-energy
https://mb.com.ph/2025/12/08/who-wants-to-pay-14kwh-for-offshore-wind
https://thefederalist.com/2025/11/10/rfk-jr-probes-health-dangers-of-offshore-wind-turbines