In the U.K., two consented projects lost their revenue-support contracts and a third with a signed contract still failed to survive rising costs. In Sweden, most projects never reach an economic test at all, because the government rejected eleven of thirteen pending applications on national-security grounds this July.
Offshore wind now fails for genuinely different reasons, and clearing one hurdle says nothing about whether a project will clear the next one. In the United Kingdom this year, developers have lost projects both for lacking government revenue support and, in one case, despite having it. In Sweden, the government rejected most of the offshore wind applications in front of it before economics ever entered the conversation. For lenders, equity investors, suppliers, and corporate buyers relying on a specific project’s future output, that split matters more than any single headline about a permit or an auction result.
The clearest example came in the U.K. EnBW had been developing the 3-gigawatt Mona and Morgan offshore wind projects with BP, and later JERA Nex bp, since 2021. Both projects had secured development consent by the end of 2025, clearing one of the industry’s biggest hurdles. But after neither project secured a Contract for Difference in the U.K.’s seventh allocation round, announced in January 2026, EnBW concluded they no longer met its investment criteria. Citing higher supply chain costs, rising interest rates, and the loss of government-backed revenue support, the company booked a €1.2 billion impairment, exited both projects, and JERA Nex bp assumed full ownership of Mona. The permits were in place. The economics were not.
Ă˜rsted’s Hornsea 4 Shows a Signed Contract Is Not a Guarantee Either
The opposite failure mode showed up a year earlier, and it is arguably more unsettling for anyone underwriting offshore wind exposure. Ă˜rsted’s 2.4 gigawatt Hornsea 4 project had already secured a Contract for Difference in the U.K.’s sixth allocation round in September 2024. The revenue-support hurdle was cleared. Ă˜rsted announced on May 7, 2025 that it would discontinue the project in its existing form anyway, citing continuing supply-chain cost increases, higher interest rates, and increased construction and operating risk.
A Contract for Difference (CfD) provides an inflation-linked strike price and long-term revenue stabilization over the contract term, yet it does not guarantee that the strike price will insulate developers from severe spikes in development, financing, and construction costs. For the 2,400 MW Hornsea 4 project, which secured a contract in Allocation Round 6 (AR6), escalating supply chain costs and rising interest rates ultimately eroded the project’s economics to the point where developer Ă˜rsted discontinued it in its current form. Despite these macro headwinds, the U.K.’s eighth allocation round (AR8) opened its bidding window with the Administrative Strike Price for fixed-bottom offshore wind held flat at £113 per megawatt-hour in 2024 prices—unchanged from the ceiling set for Allocation Round 7 (AR7), where successful bids actually cleared significantly lower at £91.20 per megawatt-hour in England and Wales and £89.49 per megawatt-hour in Scotland. Whether AR8’s final results clear meaningfully below that ceiling remains the critical question hanging over every bid submitted during the summer window. The resulting gap between contracted supply on paper and actual delivered supply on the water continues to pressure corporate balance sheets.
Sweden’s Permitting Gate Decides the Outcome Before Economics Are Tested
Sweden runs a different risk profile. In its two most prominent recent decision batches, the government has rejected substantially more offshore wind proposals than it has approved, primarily on defense grounds. On July 16, 2026, Sweden’s Ministry of Climate and Enterprise approved just two of thirteen pending offshore applications, rejecting the other eleven after the Swedish Armed Forces concluded they would conflict with areas designated as being of national interest for military defense. That followed a similar rejection of thirteen applications in 2024. For these projects, the permitting gate decides the outcome before economics are even tested.
The two approved projects show that clearing it still is not the end of the story. Days after Vattenfall’s Vidar project won its permit, the company’s chief executive told Reuters that Vattenfall would not proceed with the project under current market conditions, since it is not commercially viable as things stand. Subsea export-cable permissions are still required before construction on either approved project can begin, so the permitting process itself is not even fully finished. Developers have indicated that additional public support or different market arrangements may be needed before the approved projects become investable, a signal that a Swedish permit, even a rare one, does not settle whether a project gets built.
Four Different Failure Points, Not One
The four cases do not reduce to a single storyline. Mona and Morgan were consented projects that never secured revenue support and were no longer economic for EnBW without it. Hornsea 4 was a consented project with a Contract for Difference that became uneconomic anyway under changed cost and risk assumptions. Vidar is a newly permitted project in a market with no comparable offshore-wind revenue-support structure, and Vattenfall says it is not currently profitable regardless. Sweden’s eleven rejected projects never reached an economic test at all; they failed the defense-compatibility gate first. Each case is intensifying debate over whether current revenue-support mechanisms sufficiently account for movements in financing, construction, and supply-chain costs. Neither the U.K. nor Sweden has settled on a common answer.
What Finance and Investment Teams Should Actually Be Tracking
None of this means offshore wind has stopped attracting capital; AR7 alone procured approximately 8.4 gigawatts of fixed-bottom and floating offshore wind capacity. What has changed is which single data point is worth trusting. A permit approval says nothing about whether a project’s revenue support, if it has one, still covers what the project costs to build. A revenue-support contract says nothing about whether the site will clear a government’s separate review, or whether the developer’s broader finances can absorb a delay.
Multinational buyers should treat permitting risk, revenue-support risk, and developer financial risk as three separate underwriting questions rather than one. Progress on permitting does not guarantee a viable revenue model, and financial strength does not ensure a project will reach completion. Evaluating each independently is now baseline due diligence for anyone relying on a specific offshore wind project’s output.
