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European Wind Turbine Costs Set for 1st Decline Since 2020, Wood Mackenzie Says

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European wind turbine costs are on track for their first decline since 2020 as intensifying competition and lower tender prices reshape the market, Wood Mackenzie said in a report on Monday.

Across leading European onshore markets, rising tender volumes have pushed winning prices lower. To protect margins, suppliers must cut manufacturing costs while continuing to invest in larger and more efficient turbine designs.

A packed 2026-27 auction calendar will test Europe's redesigned offshore wind tender framework. Longer contracts for difference of 20 years or more, broader award criteria and new incentives seek to restore investor confidence, Wood Mackenzie said.

After failed offshore tenders in 2024 and 2025, governments shifted more project risk away from developers under the new framework.

The next 18 months of auctions will determine whether the reforms can withstand ongoing cost pressures, according to the report.

Under China's 15th Five-Year Plan, wind and solar should account for more than 50% of installed power capacity by 2030. Although offshore projects still face obstacles, onshore wind continues to expand rapidly, according to the report.

To maintain that growth, developers must secure stronger electricity demand. As market-based pricing expands and mechanism prices decline, trading strategies and energy storage will play a larger role in returns than construction volumes.

Older wind turbines will continue operating at many of the best wind sites outside China into the next decade as a growing decommissioning backlog slows replacements.

High repowering costs, advanced maintenance and limited policy support continue to discourage upgrades, Wood Mackenzie strategists said.

Although repowering activity is gradually accelerating, the strongest efficiency gains will come from sites with superior wind resources and grid access. Over time, that trend should steadily improve the overall fleet, according to Wood Mackenzie.

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