Why is onshore wind growth slowing?

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Wind power already plays a major role in Europe’s electricity system. In 2024, wind generated around 20% of all electricity consumed in Europe and 19% in the EU. The EU aims to increase wind’s share to 34% by 2030 and more than 50% by 2050. According to the International Energy Agency (IEA), global wind capacity is still expected to nearly double by 2030, highlighting its central role in the energy transition despite current deployment challenges.

Despite this potential, the growth of onshore wind has slowed in many regions in recent years. In 2025, Europe installed around 19 GW of new wind capacity, bringing the total to approximately 304 GW. However, the EU needs to build roughly 30 GW annually to stay aligned with its 2030 energy and climate targets. If’s Senior Underwriter in Green Energy and Engineering, Netta Keski-Keturi, highlights that the reasons behind the slowdown are complex and extend beyond technological considerations. Regulatory barriers, economic pressures, grid constraints, and local opposition all contribute to slower deployment, even as demand for renewable electricity continues to grow.

In 2025, Europe still invested around €45 billion in new wind energy projects to be built in the coming years, showing continued long-term confidence in the technology.

Permitting and regulatory bottlenecks

One of the most significant obstacles to expanding onshore wind is the slow and complex permitting process. Across Europe, projects representing roughly 80 GW of potential wind capacity are stuck in approval stages, delaying construction and creating uncertainty for developers.

While the new EU rules aim to accelerate permitting, many countries still struggle to meet the target of issuing approvals within 24 months. In practice, developers often face substantially longer timelines, and delays weaken project economics by exposing projects to changing market conditions.

Some countries have shown that faster progress is possible. Germany approved nearly 15 GW of new onshore wind capacity in 2024 — a national record and roughly seven times more than five years earlier after reforms introduced binding permitting deadlines.

Grid constraints and infrastructure challenges

Another major challenge is the limited grid capacity. Even when new wind farms are built, connecting them to the electricity system can be slow and costly. Grid bottlenecks are increasingly restricting how much new renewable generation can be integrated.

More than 500 GW of potential wind capacity is currently waiting for grid connection assessments, demonstrating the scale of the challenge. In some regions, the main limiting factor is not wind resources or investment, but the power system’s ability to absorb additional generation.

Rising costs and market pressures

Macroeconomic conditions have also affected wind development. Inflation, higher interest rates and increased raw material prices have raised the cost of manufacturing and installing wind turbines. Supply chain constraints have further slowed project execution. Because wind projects require large upfront investments, higher financing costs can significantly impact profitability, leading some developers to delay investment decisions.

Additionally, when large volumes of wind generation occur simultaneously, electricity prices may temporarily fall due to oversupply. This price cannibalisation effect has become increasingly visible across Europe, making new investments more challenging.

Price cannibalisation and regional concentration effects

The regional concentration of onshore wind farms amplifies the price cannibalisation effect. When many turbines located in the same area produce electricity during high‑wind periods, a large surge of generation pushes market prices down sharply. This reduces revenues for wind producers and increases price volatility.

Geographical clustering also creates challenges for transmission system operators (TSOs). Large volumes of wind power must be transported from production regions to major demand centres, increasing pressure on transmission infrastructure and raising the risk of bottlenecks.

Slower growth in electricity demand

Wind expansion is also constrained by slower than expected growth in electricity demand. While wind generation has increased rapidly, electrification of key sectors, such as industry, transport and heating has progressed more slowly than anticipated.

Electricity currently accounts for around 23% of total energy use in the EU, but this share is expected to grow significantly as industries shift to fossil-free processes, electric mobility grows and data centres and hydrogen production expand. Many of these future demand drivers are, however, advancing more slowly due to permitting challenges, financing constraints or policy uncertainty.

This slower-than-expected demand growth is also a critical factor behind the slowdown in investments. Discussions with energy sector stakeholders consistently highlight the need for stronger electricity demand growth, with hydrogen in particular seen as a key enabler. At the same time, this reflects a classic “chicken-and-egg” challenge: investments in clean electricity supply depend on demand growth, while the emergence of new demand—such as hydrogen—requires abundant, affordable renewable power.

Hydrogen, synthetic methane and the Nordic advantage

The slower expansion of onshore wind also has broader implications for emerging clean energy value chains, particularly hydrogen and synthetic fuels. Green hydrogen production depends on abundant and low-cost renewable electricity, and insufficient wind capacity can make investors more hesitant to commit to large-scale projects.

At the same time, the growing regional concentration of onshore wind farms increases the price cannibalisation effect and adds pressure on transmission networks. These dynamics are especially relevant in the Nordic region, which has a natural strategic advantage in synthetic methane production. A key underlying advantage is the availability of low-cost, green electricity, as Nordic countries consistently have among the lowest electricity prices in Europe. Several industrial facilities already capture CO₂, providing a ready feedstock that can be combined with green hydrogen. However, realising this potential requires strong growth in renewable electricity generation, especially from onshore wind, to support integrated power‑to‑gas systems and broader hydrogen ecosystem development.

Public acceptance and land-use challenges

Local resistance also plays a role in slowing development. Concerns often relate to visual impacts, noise or effects on wildlife or landscapes. While studies show that bird collisions with turbines are significantly fewer than those involving buildings or other infrastructure, local resistance can lead to lengthy legal processes and stricter zoning rules.

Some countries, however, continue to expand wind rapidly. Lithuania, for example, added 759 MW of new wind capacity in 2025, increasing its total capacity by over 40% and covering roughly one-third of its electricity demand through wind power, reducing reliance on fossil fuel imports.

Conclusion

Onshore wind remains a key pillar of the global energy transition, but its recent slowdown reflects a mix of regulatory, economic and system level constraints. Lengthy permitting, grid bottlenecks, rising costs, market volatility and local opposition all weigh on project development. At the same time, regional concentration of wind production heightens price volatility and increases pressure on transmission networks, further complicating investment decisions.

Wind energy also plays a central role in enabling green hydrogen and synthetic fuel production, especially in regions like the Nordics where CO₂ capture infrastructure already exists. Insufficient renewable capacity therefore affects not only electricity markets but also the development of future low‑carbon industries.

Despite the current slowdown, the long-term potential of onshore wind remains substantial. Faster permitting, modernised grid infrastructure, and stable policy frameworks will be essential to unlock future growth. With the right measures in place, onshore wind can continue to expand, strengthen energy security, and support the transition to a cleaner and more resilient energy system.

From an industry perspective, insurance also plays a key role in enabling the energy transition. If is actively involved in insuring renewable energy projects, including both new developments and operational onshore wind assets, supporting the sector throughout the project lifecycle.

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