FEATURE: Offshore wind’s two-speed economy

FEATURE: Offshore wind’s two-speed economy

Specialist vessels and equipment are attracting investment as offshore wind developers face increasingly complex projects. But a large development pipeline is no guarantee of investor appetite, highlighting a widening gap between the economics of the physical supply chain and those of the projects it serves.

On one side, companies are spending heavily to secure the equipment and expertise they expect to be needed for the next generation of projects. Specialist vessels are commanding strong day rates, while less visible parts of offshore construction are generating new orders.

On the other, capital is becoming more selective. Developers with substantial project pipelines — and even developers with a single, fully consented, government-backed project — are finding that neither guarantees an acceptable return.

The result is an industry that is simultaneously expanding, consolidating and becoming more selective: scarcity can support investment in the supply chain even as rising costs, financing rates and execution risks make some individual projects harder to justify.

A €501 million bet on the foundations

A striking recent move is Cadeler’s €501 million acquisition of Menck, the German specialist in offshore foundation-installation equipment and technology.

Menck provides hydraulic impact hammers and other specialist equipment and engineering services used to install fixed-bottom offshore foundations. Cadeler says the acquisition gives it a broader foundation transport and installation offering, while Menck will continue operating as a standalone business and serving other installation contractors.

The transaction is therefore not simply the conventional acquisition of another supplier. Cadeler is investing in a critical part of the technology chain that determines what its installation vessels can actually build.

The rationale is straightforward: offshore projects are becoming harder to execute.

“Offshore wind projects continue to increase in scale and technical complexity, making reliable execution more important than ever,” he says. “Bringing together Menck’s specialist engineering capabilities with Cadeler’s offshore installation proficiency, we are combining highly complementary strengths that will enhance our support to customers across the full installation value chain.”

The offshore-wind vessel market is often discussed in terms of the number and lifting capacity of jack-up installation vessels. But the vessel is only one component of the installation system. As monopiles and other foundations become larger, contractors also need increasingly capable hammers, drilling equipment, noise-mitigation systems, engineering expertise and specialist handling equipment.

Cadeler is effectively bringing more of that capability inside the group, reducing its reliance on subcontracted specialist equipment and engineering while retaining access to Menck’s wider market expertise.

Menck’s technology base includes more than 150 years of engineering experience, and Cadeler says the business has accumulated more than 50 million data points from driven-pile installations. It is also developing a next-generation Wind Hammer intended for ultra-large foundations, with the first unit expected in early 2027.

“Cadeler will strengthen Menck’s financial flexibility to support and accelerate the execution of our continued growth plan,” said Menck executive vice president Jochem Scherpenisse. “With Cadeler, we will have a strong platform to further develop our business and to continue to deliver trusted solutions to customers across the offshore wind industry.”

The less glamorous business of protecting cables

Further down the construction chain, UK-based Tekmar Group has won a contract worth approximately €1 million to design and manufacture concrete protection and stabilisation solutions for cables on a major unnamed European offshore wind farm. Delivery is scheduled during 2026.

The contract is much smaller than Cadeler’s acquisition, but it is another example of the specialist engineering beneath the headline turbine-installation figures.

Offshore cables have to contend with seabed movement, exposure, impact risks and the potential for damage where burial is difficult or inadequate. Tekmar’s concrete solutions are designed to provide protection and stabilisation around this infrastructure. Failure can have serious consequences for a wind farm’s ability to export electricity.

“This is a demonstration of the company’s market-leading position in asset protection technology, the strength of the relationships we have with customers and the progress we are making in broadening our offer to customers across the global offshore wind and oil and gas markets, with the aim of our concrete solutions offer mirroring the success of our wider cable protection technology business,” said Richard Turner, chief executive of Tekmar Group.

The €1 million award provides another indication that the offshore-wind construction supply chain remains active, and that increasingly specialised work is being carved out for companies with particular engineering and protection capabilities.

The workboat squeeze

Another part of the marine supply chain is also seeing strong conditions: commissioning service operation vessels (CSOVs).

The European CSOV market remains tight, with high-specification vessels capable of commanding day rates well above €60,000 in short-term employment. At the same time, vessels are approaching the end of summer contracts, creating an interesting test for the market as owners look for follow-on employment.

Modern CSOVs are expensive, specialised assets. They provide accommodation and offshore personnel-transfer capability, together with walk-to-work systems, cranes, stores, workshops and other equipment required to support offshore-wind construction and operations. Strong day rates improve their economics and make investment in new tonnage easier to justify.

But the market also illustrates a broader constraint: specialist marine capacity cannot necessarily be added as quickly as developers can announce projects. At the heavy end, there are jack-ups and foundation-installation vessels. Then come cable-lay and support vessels, survey vessels, SOVs and CSOVs, CTVs and multicats, all of which may be required by a single project at different stages.

The market therefore needs not simply more vessels, but the right vessels, in the right geographic location, with the right equipment and at the right time.

That strength is now being tested by contract rollover. If several vessels become available simultaneously, owners may find that today’s high rates are difficult to maintain. Conversely, if the expanding offshore-wind pipeline absorbs the tonnage, today’s tightness could become a more structural feature of the market.

And then there is the money

The strength of the supply chain does not necessarily translate into higher valuations for the businesses developing offshore-wind projects. The economics are different: specialist contractors can benefit from scarce assets and expertise, while developers have to make individual projects work against rising construction and financing costs.

German renewable energy developer PNE is one example. PNE has been running a structured process to seek an investor for the purchase of up to 100% of its shares. But on 10 August the company confirmed that the interest received indicated that prospective buyers’ price expectations were below the prevailing market price of the PNE share.

“The price expectations of potential acquirers are below the current market price level of the PNE share,” the company said. “Against this background, it is currently uncertain whether a transaction will take place and what its terms would be.”

That does not mean PNE’s business is failing. Its subsequent half-year results, published on 13 August, showed normalised EBITDA of €27.4 million, up from €4.7 million a year earlier. PNE also sold eight wind and solar projects totalling 163MW during the first half of 2026 and reported a project pipeline of 21.7GW at the end of June.

“We have achieved important operational successes in a challenging market environment and have shown that high-quality wind and photovoltaic projects continue to be in demand,” says Heiko Wuttke, CEO. “However, we also see that we and the entire industry currently have a hard path to take, which is characterized by many uncertainties.”

The issue is partly the difference between potential capacity and projects capable of generating near-term returns. Much of PNE’s pipeline is at an early development stage. Projects still have to clear permitting, grid-connection, financing, procurement and construction hurdles, meaning a company can have billions of euros’ worth of potential future development while prospective buyers remain unwilling to pay the valuation its shareholders expect.

When even a consented project doesn’t stack up

PNE is not the only recent illustration of this caution, and not the most extreme one.

In May 2025, Ørsted discontinued development of Hornsea 4, a 2.4GW offshore wind farm off the Yorkshire coast that would have ranked among the largest in the world.

Hornsea 4 was not an early-stage prospect struggling to attract a buyer, as much of PNE’s pipeline still is. It had already secured planning consent, and in September 2024 had been awarded a UK Contract for Difference guaranteeing a 15-year price of around £83/MWh.

Ørsted walked away anyway, the company pointing to continued increases in supply chain costs, rising interest rates, and growing risk around building and operating a project of this scale on schedule, saying the combination had eroded the project’s value creation below its investment bar.

The cancellation was expected to cost Ørsted between €470 million and €605 million in breakaway fees and write-downs, on top of a market value that had already fallen by around 80% from its 2021 peak.

The contrast with PNE is revealing. PNE has a large pipeline but has struggled to attract acquirers willing to meet its valuation. Ørsted had a single, fully consented, government-backed project — and still concluded that it could not deliver an acceptable return under prevailing cost and financing conditions.

A guaranteed price and a granted permit were not, on their own, enough to clear the bar.

Two speeds, one industry

At the physical end, offshore wind is becoming larger and more complicated. Cadeler is paying €501 million for foundation-installation expertise, Tekmar is winning specialist cable-protection work, and CSOV operators are commanding strong day rates.

At the project-investment end, caution is rising. PNE’s and Ørsted’s experiences, different as they are in scale and stage, show that neither a large pipeline nor a permitted, price-guaranteed project is necessarily bankable.

That divergence is likely to shape the marine market.

If developers concentrate capital on the strongest projects, demand and scarcity value should remain high for contractors with specialist vessels, equipment and technology. The supply chain can therefore remain tight even as the overall development pipeline becomes more selective.

The distinction matters. A company can invest €501 million in a foundation-installation specialist because it sees long-term value in scarce equipment and expertise, while another company with a 21.7GW pipeline struggles to find a buyer willing to meet its valuation. A third can walk away from a project it had already been guaranteed a price to build.

The likely consequence is further differentiation. Weaker projects are more likely to be delayed, sold or redesigned, while companies across the supply chain have an incentive to control scarce assets and expertise rather than rely on third parties.

The offshore-wind industry may therefore be growing at two speeds: projects face a higher bar for capital, while the specialist infrastructure needed to build the projects that do survive can become more valuable.