Around 137 substations will be installed offshore continental Europe this decade, requiring $20bn in total investment, according to Rystad Energy analysis.
Over 120 of these facilities will be installed between 2024 and 2030 at a cost of around $18bn.
The surge in substation developments is being fuelled by the increased scale of offshore wind projects and their distance from shore, with projects exceeding 1GW of capacity requiring multiple substations.
As such, annual spending on offshore substations will increase steadily through 2030, rising from an average of $1.4bn per year from 2015 to 2023, to a new high of $8.4bn in 2030.
Offshore substations are particularly beneficial for projects over 200MW in capacity and located more than 15 km from shore, as they help minimise power transmission losses.
They are also valuable for other energy initiatives, such as electrifying offshore oil and gas production platforms.
The primary electrical system of an offshore substation includes switchgear, transformers/converters, a reactive power compensation system and an earthing system.
Many European countries have set ambitious offshore wind installation goals which are set to transform the continent into a hub for substation activity.
Europe is set to install eight new offshore substations in 2024 alone, double last year’s number.
This year, new offshore substations will be confined to wind projects located within 50 kms of the coast while Rystad also expects that in the latter half of this decade there will be a “notable uptick” in offshore wind installations beyond the 50km mark, driving more need for offshore substations.
“We will see a substantial increase in spending in the offshore substation market this decade. This is linked to growing installed capacity in Europe and will be further amplified when floating wind technology takes off.
“Floating wind turbines are situated far from shore, meaning we could see the first floating substations in the early 2030s,” said Petra Manuel, senior offshore wind analyst at Rystad Energy.
Offshore substations can be divided into two sub-components: the topside, which contains the main electrical power system, auxiliary systems and the topside housing; and the foundation, which holds the weight of the topside structure.
Jackets, which are fixed to the seabed with piles at each leg, have been the preferred foundation concept for most offshore substations since they can support wider and larger structures.
However, some projects have also used monopiles driven directly into the seabed.
Of the nearly 100 offshore substations installed in Europe between 2014 and 2016, jackets held an almost a 70% share, with monopiles accounting for less than a quarter.
Some of the substation foundation concepts to be used in 2025 and 2026 are not yet known, so Rystad has noted them as unspecified in its research.