Published in La Tribune on November 27.
Are investments in offshore wind farms for electricity generation now profitable, or is it necessary to continue subsidizing them? Two recent events suggest that this industry is not as close to "grid parity" as its advertising would have us believe: on the one hand, an unsuccessful Danish tender, and on the other, Shell's abandonment of its projects off the coast of Scotland.
No bidders for the Danish tender of October 16, 2025
Since the beginning of the century, Denmark has radically greened its electricity production. In 25 years, the country has increased wind energy to more than 58% of its electricity mix and photovoltaic production to nearly 11%. And the Danish government does not want to stop there. In October 2025, it launched a tender for a 1GW wind farm located in the North Sea about 95 kilometers offshore. The name of the winner was to be announced in spring 2026. The initial project even planned to auction off two 2GW lots, but the government scaled back its ambitions to attract more bidders. These hopes were dashed, as no bids were submitted within the deadline set for the tender. This was probably due to the sharp increase in the cost of the installations to be built. To prevent this fiasco from happening again, the Danish government will subsidize offshore wind power to the tune of €1 billion in 2026 before preparing a Contract for Difference system to be applied from 2027.
Shell's change of strategy
The cost overruns explain the renewed caution among investors. Just as Sweden's Vattenfal suspended its Norfolk Boreas project in the United Kingdom (1.4 GW) in July 2023, Shell announced in November 2025 that it was abandoning two projects in Scotland. Shell and Scottish Power (a subsidiary of Iberdrola) were partners in the MarramWind and CampionWind projects. Considering the low expected return on these investments, Shell sold its 50% stake in the MarramWind project to ScottishPower, becoming the sole owner of CampionWind in return, a project it immediately announced it was abandoning in favor of refocusing on hydrocarbons.
The profitability of wind-generated electricity
The main financial drawback of wind turbines is that they cannot be controlled. Like photovoltaic panels, they supply electricity depending on the weather and the seasons, making the income from sales very unpredictable. It is possible that the wind will blow mainly at night, when demand is low. The resulting market price is then very low, or even negative. And at peak times (in our latitudes, at the end of the day in winter), there may be no wind, depriving wind turbine owners of substantial income. To reduce these risks, investors lobby for public subsidies or, failing that, sign contracts with large buyers. But this is a transfer of risk for which it is not easy to find an interested party. Indeed, when large energy consumers seek to sign Power Purchase Agreements (PPAs), it is to secure their supply. It is therefore not surprising that the uncertainties affecting wind power generation are a deterrent for these consumers. In the absence of subsidies, there is therefore a high probability that investors in wind farms will be forced to sell their production on the wholesale markets, thus losing the security provided by PPAs. Contracts for Difference signed with the government reduce the extent of the risks affecting revenues, as the company receives the market price plus compensation if the price falls below a pre-set threshold, or minus a refund when the market price rises above a second pre-set threshold. Public money therefore serves as insurance against market fluctuations.
And in France?
The draft Third Multiannual Energy Program (PPE3) submitted for consultation in March 2025 plans to increase installed offshore wind capacity from 0.84GW in 2023 to 18GW in 2035. Annual production is expected to increase from 1.9TWh to around 71TWh (which, it should be noted, presupposes a significant improvement in the load factor). In light of the Danish and Scottish experiences mentioned above, achieving these targets will require convincing investors through substantial direct subsidies or mechanisms such as contracts for difference, which suggests that electricity prices are likely to rise significantly.
For the time being, the PPE3 has not been the subject of an implementation decree. The minister responsible for this may question the usefulness of including these exorbitantly expensive wind turbines in an electricity mix where low-carbon production already accounts for 95%.
Photo: insung yoon Unsplash
