Marine renewable energy

Marine renewable energy includes both offshore wind energy and other sources of ocean energy. The most consolidated marine energy sector is the offshore wind industry, in which the majority of products still use bottom-fixed offshore technology, but there is a trend towards the use of floating offshore technologies, with less impact on the seabed. Ocean energy is a promising sector, in which the EU has taken a leading role.

Offshore wind energy

Offshore wind energy is currently the only commercially deployed marine renewable energy with wide-scale adoption. Although the EU had only a small number of demonstration plants in the early 2000s, it now hosts a cumulative capacity of 18.9 GW of offshore wind, spread across 11 countries.

Size of the EU offshore wind energy

The sector generated more than € 5.3 billion in gross value added (GVA) in 2022, a 42%-increase compared with 2021. Gross profit accounted for € 4.1 billion, up 56% since 2021, and the turnover reported was about € 25 billion. Provisional data for 2023 show that growth continued for these three indicators.

The sector directly employed 17 300 people in 2022 – with the provisional estimation for 2023 being 18 400 people – continuing the general pattern of growth observed in the past decade. The average annual wage was €72 100 in 2022, a 5%-increase compared with 2021 (Figure 20), and was estimated at €71 500 for 2023.

Figure 20 Size of the EU offshore wind energy subsector, 2009–2023 (provisional data for 2023): turnover, GVA and gross operating surplus (€ billion); people employed and average wage (€ thousand)

Results by sub-sector and Member State

Using Eurostat data and accounting for the production, transmission and distribution of electricity, employment in the offshore sector can be estimated.

Figure 21 Share of employment and GVA in the EU offshore wind energy subsector, 2022

Figure 22 Employment in the offshore wind energy subsector, 2014–2024

Trends and drivers

The European offshore wind sector has undergone a significant transformation over the past 15 years, driven by a combination of technological innovations, economies of scale, and supportive policies. As a key component of the EU’s energy mix, offshore wind has benefitted from the experience and expertise gained in the onshore wind sector, and from the development of new technologies and practices.

The EU has set ambitious targets for the offshore wind sector, aiming to deploy approximately 111 GW of capacity by 2030 and 317 GW by 2050, which will contribute to achieving a 42.5% share of renewables by 2030. This year, the EU has taken further steps to support the development of net-zero technologies, including offshore wind, through the introduction of the Net Zero Industry Act. This landmark legislation aims to boost the manufacturing of net-zero technologies within the EU, ensuring the region remains a leader in the global transition to a low-carbon economy.

By the end of 2023, the cumulative installed capacity for offshore wind energy production in the EU had reached 18.9 GW, with an increase of 2.1 GW compared with the previous year. Preliminary and provisional data for 2024 indicate a total addition of 2.2 GW, bringing the cumulative total to 21.2 GW (Figure 23).

EU-headquartered manufacturers dominate the EU’s offshore wind market accounting for almost all new deployments in 2023. The United States is an important market for European suppliers, illustrated by the 5.8 GW of capacity currently in construction there, for which approximately 52% of capital expenditure was awarded to EU-headquartered companies. Several EU-headquartered tier-1 suppliers (i.e. direct suppliers to the company that assembles or sells the final product) have made significant investments in United States-based facilities.

Figure 23 EU offshore wind energy capacity additions and installed capacity (GW), 2010–2024

The levelised cost of electricity (LCOE) of bottom-fixed offshore wind energy has decreased as the deployment of larger offshore wind energy installations has increased. For 2024, LCOE for offshore wind is estimated at 56-102 €/MWh in Denmark, 62-109 €/MWh in Germany, 55-120 €/MWh in the Netherlands, and 114-170 €/MWh in France.

Floating wind energy

Floating wind energy is an emerging sector within the offshore wind industry that is progressing steadily toward commercial viability. Floating wind energy installations can be deployed in deeper water than bottom-fixed turbines, increasing the marine space and wind resources available.

Technological differences between projects are mainly linked with floating structures. Most projects use semi-submersible floating technologies, while fewer projects use spar-buoy, barge, tension-leg platforms or semi-spar floating technologies. Semi-submersible and spar-buoy technologies have already reached technology readiness level (TRL) 8-9, while the Floatgen pilot project in France upgraded concrete barge technology to TRL 7-8. Tension-leg platform technology was tested with a prototype (TRL 6) launched off the coast of the Canary Islands, as part of the PivotBuoy project by X1 Wind.

Current floating wind energy projects in the EU account for 29 MW of operating projects with an additional 90 MW underway in France. Installed capacity is expected to grow to 3 GW by 2030 and over 40 GW by 2040. The floating wind energy sector is also expanding worldwide, with an installed capacity expected to reach almost 7 GW by 2030 and over 70 GW by 2040.

The LCOE of floating wind energy is currently higher than that of bottom-fixed wind energy. This is partly due to the more intensive manufacturing and engineering requirements but also due to low-deployment levels, which have restricted economies of scale and learning opportunities to date. Additionally, multiple competing floating substructure technologies are in development, further preventing standardisation. The time frame for the commercialisation of floating wind has moved from before 2030 to mid-2030s.

The LCOE is also project-dependent. In 2020-2023, LCOE ranged from 145 €/MWh (for the Hywind Tampen project in Norway) to 350 €/MWh (for the Fuyao project in China), with the Windfloat Atlantic project in Portugal having an intermediate LCOE of 240 €/MWh. Obtaining a clear understanding of the LCOE for floating wind energy is challenging, due to the limited deployments of and highvariability in offtake contracts .

Market attractiveness and auction outcomes

As a result of the COVID-19 pandemic, the world was faced with global supply-chain shortages, logistical challenges brought on by travel restrictions, and rising energy costs, which were then exacerbated by Russia’s war of aggression against Ukraine. High inflation, tight supply chains and rising interest rates disproportionately affected the capital-intensive offshore wind market, eroding the business case for many projects. In 2022, a record low value of final investment decisions was observed. Although 2023 and 2024 showed investments increase to above pre-pandemic levels (Figure 24), some markets have been slow to adjust to the new risk and cost environments, meaning forecast growth is below previous trajectories.

Figure 24 Final decisions on investments in offshore wind energy (GW), 2010–2024

Offshore grid development

Meeting European offshore wind goals will require the rapid and concentrated deployment of projects. Rather than radial connections to the grid, European transmission system operators are pursuing a strategy involving cooperation and coordinated planning, facilitated by standardisation and interoperability. The industry has settled on a 2GW 525kV high voltage direct current (HDVC) platform-based grid connection as the basic concept for this system design.

To facilitate deployment, contracting has moved from a link-by-link basis to large multi-year framework agreements for the supply and installation of multiple platforms, their foundations and connecting cable systems.

Several countries have awarded or are in the process of awarding framework contracts for offshore HVDC coordinated grids (Netherlands, Germany, Netherlands, France and the United Kingdom). Given the high demand for offshore HVDC connections, securing the supply of high-voltage equipment has become critical for timely project delivery. Historically, HVDC systems have taken 4-5 years to deliver, but with current global supply chain constraints and high demand, timelines are now 6-7 years from contract finalisation, with contracting taking an additional year. Transformers are particularly challenging as they connect to the local alternating current grid and therefore require customisation.

The shift to framework contracts provides visibility regarding long-term revenues, and therefore gives original equipment manufacturers, such as Hitachi, the confidence they need to invest in facilities and training.

Ocean energy

State of play of technologies and projects in the ocean energy sector

Operational ocean energy production capacities

At the end of 2024, the emerging operational ocean energy capacity in the EU (i.e. ocean energy capacity excluding the already-established tidal range technology projects) was 2.82 MW, including 1.63 MW for tidal energy, 1.12 MW for wave energy and approximately 70 kW for salinity gradient. In 2024, 770 kW of emerging ocean energy capacities were installed or tested in the EU, slightly above the 715 kW of additions in 2023 (see Figure 25). There is currently no operating capacity in the EU or in Europe for ocean thermal energy conversion technologies. EU-based companies have also been active outside EU waters, with 1 200 kW of capacity added in the Faroe Islands (Figure 25).

The only established ocean energy project in Europe, the La Rance tidal barrage (240 MW), has experienced capacity losses in recent decades due to the aging of the installation. This has resulted in the total ocean energy capacity in the EU (including emerging and established capacities that are operational) remaining relatively stable over the past 10 years (2014-2023), despite new additions through emerging ocean projects. The barrage should recover part of its initial capacity after the current phase of renovation (2021-2026). Since 2011, no new projects using tidal range technology have been developed. In 2023, according to the International Renewable Energy Agency (IRENA), the total operational ocean energy capacity – both emerging and established – reached 508 MW globally. Europe accounts for approximately half of global capacity (243 MW out of 508 MW).

Ocean energy is also becoming increasingly significant in terms of energy production. In 2024, with the advancement of renovation works, electricity production from the La Rance tidal barrage was expected to be restored to a level of 520 GWh, compared with an average of 500 GWh over the past years. This production is equivalent to electricity consumption in the nearby regional capital of Rennes (with over 200 000 inhabitants). Some of the emerging ocean energy capacities have also been operating for several years and have proved their reliability in providing electricity to the grid (e.g. in Spain and in France).

Figure 25 Map of operational capacities for tidal stream and wave energy in the EU and the United Kingdom, 2024

Economic indicators and employment in the Ocean energy sector

Emerging ocean energy technologies are not established enough to be commercially viable based on their revenue from energy production. According to the IRENA (2019), the LCOE range from 110 to 480 €/MWh for tidal energy, and from 160 to 750 €/MWh for wave energy. In 2022, OceanSET estimated the average LCOE for whole-system TRL 7-9 at 200 €/MWh for tidal energy and at 270 €/MWh for wave energy. As tidal energy projects progress toward the market, a reference price at which electricity will be sold to the grid becomes available for the most advanced projects. The reference price for the Flowatt tidal farm in France will be determined within a range of 255 to 310 €/MWh. The UK government awarded reference prices for several tidal projects in 2023 and 2024. The common price awarded for all projects in 2024 was 204 €/MWh. This reference price decreased by 33% compared with 2023 (303 €/MWh), signalling significant progress in terms of cost reduction, and a decrease in LCOE for tidal energy.

Ocean energy projects receive significant amounts of investment from public and private sources. A total of 70 ocean energy projects were funded under Horizon 2020 between 2014 and 2022, totalling € 183 million – including € 94 million for tidal energy and € 89 million for wave energy. Since the beginning of the Horizon Europe financing period in 2021, 15 projects have been funded by the EU, with a total amount of € 51 million – including € 10 million for tidal energy and € 41 million for wave energy. These amounts are complemented by private and national public funding. According to the International Energy Agency, public investment in R&D in the Ocean energy sector reached € 48 million in Europe in 2022, accounting for 53% of the global investment.

The EU also accompanies the most advanced projects on their path to commercial readiness, notably through the EU Innovation fund (€ 31.3 million for Normandies Hydroliennes) and the European Innovation Council Accelerator program (€ 17.5 million for CorPower). EU-based ocean energy companies secured significant amounts of national funding for their most advanced projects. Investments from the private sector materialise in cooperation between specialised SMEs and energy majors, notably through venture companies. According to Joint Research Centre’s strategic energy technology plan information system, a total amount of €922 million has been invested by EU companies in 2010-2020. Over this period, 64% of investors were venture companies.

The Ocean energy sector already provides economic benefits by directing public and private investment towards creation of jobs. The nature of these jobs depends on the readiness level of technologies. At the early stages of development, ocean energy projects tend to finance jobs in R&D. In the next stage, when an innovation is promising, the creation of specialised SMEs generates additional jobs dedicated to management, administrative tasks and communication. The scaling-up of projects and energy device deployment on sea mobilise further work in financing, civil engineering and maintenance. In 2023, ocean energy projects were estimated to mobilise at least 415 FTEs in the EU within specialised ocean energy companies (energy device providers). On average, the companies identified employ 10 FTEs (13 FTEs for tidal energy, 9 FTEs for wave energy). The largest of these specialised companies, such as CorPower or Minesto, employ over 50 FTE, both in their main industrial facilities and near testing locations.

Figure 26 Overview of offshore renewable energy technologies