The offshore wind industry spends a lot of time talking about supply chain challenges like capacity constraints, rising costs, manufacturing bottlenecks, pressure on ports and skills shortages. And they’re all valid. But I increasingly wonder whether we’re focusing on the symptoms rather than the cause.
Having spent more than 30 years delivering major energy projects around the world, I’ve learned that projects rarely fail because risks exist. They struggle because risk is poorly understood, poorly allocated or owned by organisations that are not best placed to manage it. That’s why I believe one of the biggest challenges facing offshore wind today isn’t the supply chain. It’s the way we allocate risk.
As projects become larger and more complex, developers are under increasing pressure from investors to demonstrate certainty. One response has been to consolidate more scope into fewer contracts. On paper, that reduces interfaces. In reality, it often concentrates risk.
Take an EPCI strategy as an example. It removes an interface between the EPC contractor and transport and installation contractor, but it also transfers significant responsibility into a single contract. Contractors respond accordingly. Those who bid price uncertainty into the work. Contingencies increase. Competition reduces. Innovation gives way to commercial protection. Nobody sets out to create that outcome, it’s simply the result of trying to create certainty by transferring responsibility.
But risk doesn’t disappear because it’s written into somebody else’s contract. Fair allocation of risk doesn’t even mean every party carries the same level of responsibility. It means each organisation takes ownership of the risks it is genuinely capable of managing.
Today we’re seeing increasingly onerous terms and conditions pushed into the supply chain. Established EPC contractors are more likely to challenge them because they understand where the risks genuinely sit. New entrants, understandably keen to establish themselves in the market, may be more willing to accept them and that creates competition in the short term but it doesn’t necessarily create stronger projects.
One of the recurring frustrations I see is that many of the most important commercial and delivery decisions are made before the organisations responsible for executing the work have even been engaged. By the time engineering, fabrication and construction specialists arrive, contracting strategies are largely fixed, delivery models have been selected and assumptions about risk have already been made. The conversation becomes about accepting risk rather than understanding it, and that’s a missed opportunity.
The organisations responsible for delivery often have the greatest understanding of constructability, schedule risk, fabrication constraints and interface management. Bringing tier 1 partners into projects from inception through to final investment decision doesn’t remove control from developers, it just gives them access to better information.
Earlier engagement creates greater transparency around delivery assumptions meaning risks can be identified before they’re priced. Investors and insurers gain a clearer understanding of residual risk. And delivery strategies become something that’s developed collaboratively rather than inherited through procurement.
Perhaps the better question isn’t whether early engagement costs more. It’s how much contingency it removes. We’ve seen this thinking work before. Alliancing models have been successfully adopted across other parts of the energy sector for years, creating stronger collaboration, better quality and improved schedule performance. Offshore wind doesn’t need to reinvent the wheel. It can learn from what’s already been proven.
As projects continue to increase in scale, the issue of integration also becomes more important. Many of today’s biggest risks don’t sit within individual work packages, they sit between them. And that’s where the Owner’s Engineer has a critical role to play.
Rather than simply reviewing designs or overseeing contractors, an effective Owner’s Engineer acts as the programme integrator, maintaining visibility across packages, identifying interface risks and helping developers retain the commercial benefits of a multi-contract strategy without creating unnecessary management burden. In other words, reducing interfaces by combining contracts isn’t the only solution. Managing those interfaces better can often deliver the same outcome without sacrificing competition or flexibility.
The industry should also challenge itself to think differently about standardisation. We’ve proved what standardisation can achieve with turbines. The next question is where else that thinking can be applied. Offshore substations remain highly bespoke despite significant similarities from one project to the next. Adopting more standardised concepts could reduce engineering effort, shorten delivery schedules and create a far more industrial approach to fabrication and construction. Developers don’t need to specify a unique solution every time. Sometimes the most effective solution is one the supply chain has already developed.
The same applies beyond individual projects. If we want companies to invest in manufacturing facilities, ports, technology and workforce capability, they need confidence that opportunities will continue beyond a single project. Portfolio delivery models provide that confidence. They encourage standardisation, create economies of scale, accelerate learning between projects and give the supply chain the certainty needed to invest in innovation and long-term capability. That’s good for contractors, and more importantly, it’s good for developers, investors and ultimately the consumer.
If the UK wants to capture the full economic value of offshore wind, not just through clean energy but through manufacturing, industrial capability and skilled employment, then we need project models that encourage long-term partnerships rather than one-off transactions.
Offshore wind has never lacked ambition. The next phase of its success will depend on whether we’re prepared to be just as ambitious in how we choose to deliver it. For me, that starts with a different conversation. Not about how we transfer risk, but about how we understand it, manage it and place it with the organisations best equipped to deal with
Jason Brown is the global offshore wind market director for Kent