Offshore wind power is critical to securing Europe’s electricity supply, yet current market conditions do not support the level of investment needed for its large-scale deployment. That is one of the main conclusions of the European Resource Adequacy Assessment (ERAA 2024), published by ENTSO-E, the European Network of Transmission System Operators for Electricity.

The report highlights that Europe’s electricity system is undergoing a deep transformation, driven by the Green Deal, the Fit for 55 package and the REPowerEU initiative, all of which aim to accelerate decarbonisation. However, the speed of the energy transition is not matched by the market’s ability to attract sustained investment in strategic technologies such as offshore wind.

“The European power system must adapt swiftly to new challenges to maintain a year-round balance between supply and demand,” ENTSO-E states. The exponential growth of variable, decentralised, weather-dependent renewables demands new forms of system flexibility and resilience to avoid supply risks.

Uncertain investments in critical renewables

Despite its potential, offshore wind is not expanding at the pace required. According to the report, the current market design fails to provide the stable signals investors need to back this capital-intensive technology, which depends on the long-term visibility of returns.

“Risk-averse investors may postpone projects in the absence of long-term contracts,” warns the ERAA. This issue affects not only offshore wind but also other renewables that must scale rapidly before 2035.

Moreover, Europe will need to add more than 1.7 million MW of combined solar and wind capacity, but these sources alone will not be able to replace the decline in dispatchable thermal generation, currently essential to meet demand peaks or cover periods of low renewable output.

Supply security at risk by 2028 and 2030

ENTSO-E warns that resource adequacy risks are rising towards 2028 and 2030, two pivotal years for deciding whether to introduce capacity mechanisms (CMs). The LOLE (Loss of Load Expectation) indicator exceeds 10 hours per year in several regions, pointing to the need for additional reliability tools.

“The approval process for such mechanisms must be accelerated to mitigate supply risks while progressing with the energy transition,” the report asserts. Without these instruments, the market alone cannot deliver the investment levels required to retain existing capacity or bring new ones online.

Furthermore, scarcity price signals—which occur only a few hours per year—are insufficient to justify new power plant investments, especially for risk-conscious actors. This is a key insight from the Economic Viability Assessment (EVA) in the report.

Flexibility, grids and storage as system priorities

To ensure long-term energy security, ENTSO-E stresses the need to accelerate the deployment of flexibility solutions, including:

• Energy storage systems.

• Demand-side response (DSR).

• Cross-border interconnections to direct renewable power to areas of highest need.

“Europe must speed up the development of electricity grids and storage while maintaining supply security,” the ERAA states. This effort requires not only capital investment but also forward-looking planning and strong regional coordination.

A transitioning system, with critical gaps

The ERAA 2024 features advanced simulations and a new Pan-European Climate Database, offering more robust economic viability modelling. Still, the report underlines a persistent gap between Europe’s climate ambitions and actual market conditions.

“New capacity must be delivered at the right time and in the right locations—and that requires intervention when the market alone cannot deliver,” the report concludes.

The ERAA 2024 sends a clear message: Offshore wind must play a central role in Europe’s future energy mix, but this will only happen if the policy and market frameworks provide the right conditions. Europe is at a crossroads: scale up renewable investments or face growing risks to energy security.