Picture this: a country that proudly positioned itself as the poster child for the energy transition just put up for sale enough offshore wind capacity to power millions of homes… and nobody wanted it. Not one bid. Zero. Nada.
In August 2025, Germany offered more than 10 gigawatts of prime North Sea real estate for new wind farms – projects that were supposed to run without a cent of government subsidies. The result was silence. The kind of silence that makes politicians sweat and industry insiders reach for something strong.
Fast forward a few months and the German Parliament just voted to slash next year’s auction from a possible 10 GW all the way down to somewhere between 2.5 and 5 GW. That, my friends, is what a reality check looks like in the renewable energy world.
The Wake-Up Call Nobody Wanted
Let’s be honest – most of us have been conditioned to believe offshore wind is the unstoppable future. Bigger turbines, falling costs, endless clean energy just waiting off the coast. The narrative was beautiful. Then the market opened its mouth and spoke the truth.
When developers have to put their own balance sheets on the line without the safety blanket of guaranteed subsidies, suddenly those “record-low” cost projections don’t look so convincing anymore. Steel prices through the roof, ships booked solid for years, interest rates that make project finance teams cry – the list of headaches is long and getting longer.
One industry veteran told me privately after the failed auction: “We’re not anti-wind. We’re anti-bankruptcy.” That pretty much sums it up.
How Did We Get Here?
Go back five years and offshore wind auctions were a feeding frenzy. Companies were bidding insane negative subsidies – literally paying governments for the privilege of building wind farms. It felt like the industry had cracked the code.
Then reality started biting. Supply chains that were already stretched before the pandemic got absolutely hammered. Specialized installation vessels became rarer than honest politicians. Turbine manufacturers started reporting losses instead of record orders. And inflation? Don’t even get me started.
“Offshore wind is facing a difficult market environment, both internationally and in Germany.”
– German Economy Ministry statement, 2025
That’s diplomatic speak for “Houston, we have a problem.”
The Numbers Don’t Lie
Germany’s official target remains 70 GW of offshore wind by 2045. Sounds impressive, right? Except right now the country has about 8 GW installed. To hit that target they’d need to be adding roughly 3 GW every single year starting… well, yesterday.
Instead, the first half of 2025 saw essentially zero new capacity come online offshore. Onshore wind is doing better, but the big offshore push that was supposed to carry the Energiewende has stalled harder than a turbine in calm weather.
- 2025 H1 offshore additions: ~0 GW
- Required annual pace for 70 GW target: ~3 GW
- Latest auction result: 0 bids for 10 GW
- 2026 auction now reduced to: 2.5–5 GW
Do the math. It’s not pretty.
What Developers Are Really Saying
Behind the polite press releases, the message from the industry is crystal clear: the current auction design is broken. Zero-subsidy projects sounded great when costs were falling and interest rates were negative. They make considerably less sense when building a single wind farm costs billions and your financing costs just doubled.
Developers want revenue certainty. They want protection from construction delays that are often completely outside their control. They want grid connections that actually exist when the wind farm is ready – not five years later because the onshore grid expansion is stuck in permitting hell.
In short, they want the government to acknowledge that building energy infrastructure at this scale isn’t the same as selling smartphones.
The Broader European Picture
Germany isn’t alone in this mess. The UK has seen multiple auction rounds come in well below target. Danish giant Ørsted has been writing down billions on US projects. Even the usually rock-solid Norwegian sovereign wealth fund took a bath on offshore wind investments.
This isn’t a German problem. It’s a global offshore wind problem. The industry grew up on subsidies and easy money. Now that both are drying up, we’re discovering what these projects actually cost when someone has to pay the full bill.
Is This the End of the Offshore Dream?
No. But it might be the end of the fantasy version.
I’ve been following renewable energy for years, and here’s what I’ve learned: technology eventually wins, but never on the timeline politicians promise and rarely at the cost consultants predict. Offshore wind will get built. Just probably slower, more expensively, and with a lot more government support than anyone wanted to admit five years ago.
The German government’s response – cutting auction sizes while trying to speed up permitting and grid expansion – feels like the first adult conversation this industry has had in years. Yes, we want clean energy. No, it’s not free. Yes, private companies will build it. No, not if it bankrupts them.
What Happens Next
The smart money says we’re entering a new phase. Expect to see:
- Return of some form of revenue stabilization mechanisms
- More realistic auction sizing
- Governments accepting they’ll need to underwrite grid connections
- Consolidation among developers – the strong will acquire projects from the weak
- Slower but ultimately more sustainable build-out rates
It’s not the triumphant march to net zero that was promised. But it might actually be achievable.
Sometimes the hardest thing in energy policy isn’t finding the solution. It’s admitting that the old solution stopped working. Germany just did that. Whether the rest of Europe follows remains to be seen.
One thing’s for sure – the era of pretending offshore wind is cheap and easy just took a 10 GW hit straight to the hull. And honestly? We’re all better off for it.
