Floating Wind in Italy: Ready to Build, Waiting to Start

The Offshore Wind Revolution conference (“OWR”), this year held in Taranto, Italy, gathered stakeholders from across the value chain to consider the status of the Italian offshore industry and share experience from other markets. Technical assessments put Italy’s floating potential at around 207 GW, among the largest in the Mediterranean.¹ The case for offshore wind has become one based on energy security and cost: a study commissioned by AERO, the Italian renewable energy association, estimates that 10 GW would reduce Italy’s reliance on imported energy by around 16 TWh a year.² Italy’s late start in offshore has the upside potential to learn from the markets that went first, but only if it acts on those lessons.

Italy has a defined first step towards an offshore wind industry and a long-range ambition for it. The FER 2 Decree (June 2024) (“FER 2”), Italy’s incentive scheme for innovative renewables, provides a dedicated 3.8 GW offshore wind quota to be auctioned by the end of 2028, and scenarios from Terna, the national grid operator, point to around 10 GW by 2040 and 20 GW by 2050.³ The project pipeline is active: 4.5 GW has received a positive environmental assessment and 2.3 GW holds a full environmental impact assessment (VIA) decree. Yet no floating project has started construction, because the economic and regulatory framework is not yet fully operational and no FER 2 offshore auction has been held.⁴

The discussions at OWR made clear that the drag on industry ramp up is not a technology problem but one of sequencing and incentives. Each actor in the chain is waiting for a signal from another: investment needs demand, but expected demand depends on industrial and supply chain development. The risk is a stalemate, and every year of delay costs the local industry that stands to benefit if Italy can establish its ports as a strategic hub.

Floating technology: the risk has moved to scaling up

Mediterranean bathymetry places most of Italy’s offshore wind potential in water too deep for fixed foundations but suited to floating technology. Fabricators and constructors at OWR agreed that floating wind has reached commercial maturity; the open question is no longer whether it works but whether it can be industrialised: production capacity, standardised processes, logistics and a supply chain that can deliver repeatably.⁵

The AERO Study assumes cost savings of 10–15% on floater structures and 20–25% on mooring elements once the first 3.8 GW of FER 2 capacity is built, and capital cost reductions of up to 35% by 2050.⁶ Those savings are not available on day one. They are earned through volume, and the first projects in any market carry a cost and execution premium that the auction tariff, or other state support, will have to absorb.

The price of that premium is already visible elsewhere. In the UK’s seventh allocation round (AR7, January 2026), two floating projects, Erebus (100 MW) and Pentland (92.5 MW), were awarded 20-year contracts for difference at £216.49/MWh in 2024 prices — roughly €250/MWh — around 2.4 times the £91.20/MWh cleared by fixed-bottom projects in the same round.⁷ Italy should expect a comparable premium for its first projects before volume brings costs down. The current FER 2 reference tariff for floating wind is €185/MWh (against €160/MWh for fixed-bottom), which will act as a ceiling on bids rather than a guaranteed price, and the Ministry of the Environment and Energy Security’s (“MASE”) June 2026 proposal would keep it at that level. The reference tariff looks low against UK clearing prices, but the terms are not directly comparable; whether the first Italian projects can be delivered on that basis will depend on how the revised package treats indexation, grid connection costs and contract term.⁸

GWEC reports that 2025 was the first year since 2015 in which no floating capacity was commissioned globally, and orders remain thin.⁹ Floater fabricators, mooring suppliers and specialist vessel owners are likely to commit their limited capacity to markets offering visible, multi-year volume, so Italy is competing with other regions for that capacity, not just for individual projects.

Maturity also has to be proven to those financing the projects. For lenders, a technology is mature only if there is evidence that it is fit for purpose, that its material risks have been quantified, and that remaining exposures have been allocated and mitigated. A lender bankability framework presented at OWR framed this requirement as an auditable chain of evidence: mature design, independent risk assessment, pilot experience and enforceable mitigation in place by financial close. Without that chain, a technically sound project may still not be financeable.

The remaining risk sits in how the project is put together. Speakers placed the real exposure at the interfaces between engineering disciplines and contract packages, where a solution that is optimal for one package creates problems in another: for example, a floater design that suits the fabricator but complicates turbine integration or tow-out. For early floating projects, the recommendation was to package floater, mooring and installation scopes carefully, to retain owner control over the turbine, electrical and grid interfaces, and to move to fuller multi-contracting only once interface-management capability has matured. In practice, the interface matrix, the allocation of weather and port-access risk, and the treatment of turbine-floater integration are where floating projects are likely to generate disputes, and should be considered carefully at the outset.

Ports: the strategic hub

Speakers framed offshore wind as a way to build a strategic industrial supply chain for Italy, with lasting value for the host territories rather than just new capacity. On that view, ports become centres of resilience and energy independence: multi-commodity hubs whose infrastructure, once built for floating wind, can go on to serve operations and maintenance, hydrogen, clean fuels and neighbouring Mediterranean markets.

At the outset, floating wind needs ports equipped for assembly and integration, not just loading: large laydown areas, reinforced heavy-duty quays, deep water and nautical access, lifting and mounting facilities, and storage and marshalling areas. The port must cater for the life of projects, such as to support tow-to-port strategies for major turbine repairs. Even existing industrial ports need extensive upgrades to meet these needs, and for those deciding where to invest, this is where the stalemate bites hardest. Italy has already taken a first step: Taranto in Puglia and Augusta in Sicily have been designated as national floating wind hubs, under a 2023 decree-law and a July 2025 interministerial decree, but designation is only the start. The hubs still need long-term concessions, which operators say are on hold pending Italy’s port reform (industry has called for a single granting authority for offshore, on terms matching the investment horizon), funded enabling works and, above all, anchor tenants. That is the crux: with no auction date or roadmap telling ports which projects are coming, or when, ports will not commit capital to quays and assembly areas without some certainty of a sufficient pipeline of clients. Augusta has begun reallocating yard space for turbine integration, but otherwise the hubs exist largely on paper.

The underlying difficulty is a mismatch of commitment points. Developers tend to commit only at final investment decisions (“FIDs”), typically once they have won an auction, secured permits and grid connection and arranged finance; but ports, suppliers and skilled labour need years to prepare. A port authority asked to invest ahead of demand carries the risk of stranded infrastructure. A developer asked to bid without a ready port carries schedule and cost risk it cannot price.

That risk has to land somewhere in the contracts. If the quay is not ready when the installation campaign is due to start, the delay will flow through the fabrication, marine and installation contracts, and the developer will look to its port agreement for a remedy. Port reservation and access agreements therefore need defined readiness milestones and a clear consequence if they are missed, matched by equivalent relief in the downstream contracts so the developer is not left carrying the gap unexpectedly — particularly in circumstances where Italy’s FER 2 imposes strict deadlines for project commissioning (though these are under review).¹⁰

A Haskoning study of the proposed Taranto port expansion (presented at OWR) shows how that mismatch of commitment points plays out. It identifies 2026 as the critical decision point and 2029 as the critical investment decision if the port is to be ready to assemble the 21 floaters for the first 250 MW project expected to use it, before ramping up to 50–60 floaters a year¹¹ — years before any project is likely to reach FID. Haskoning proposes a phased expansion: one key industrial assembly area first, with further capacity released only as auctions, FIDs and firm port bookings materialise. Phasing reduces the risk of building ahead of demand, but does not remove it.

A useful comparator is Port-La Nouvelle in southern France. The Occitanie Region started port works there in 2019, ran its two floating pilot farms from the port, and is now sequencing commercial farms of 250 MW (2032) and 500 MW (2034). Crucially, the public side took the early infrastructure risk: the Region, the State and local authorities committed €234 million to the port expansion, and the Region’s wider €343 million programme for Port-La Nouvelle and Sète is backed by a €150 million European Investment Bank loan.¹² The port is run under a 40-year public-private concession in which the Region retains a stake, so the public sector carried the early build risk while a long-term operator was locked in to run it.

Italy will need to make the same structural choice for its hubs: port works procured directly by the port authority, a concession or public-private partnership, or a developer-led build on a concession. Each places construction, completion and demand risk differently, and the choice will shape what contractors are asked to take on and what lenders will finance.

Public funding for that early risk has also become less certain. On 22 September 2026, MASE told the Taranto and Augusta port authorities that, following budget cuts, funding for the two port hubs had been reduced from €78.3 million to €38.3 million (Taranto from €28.5 million to €13.94 million; Augusta from €49.8 million to about €24.36 million). The minister promised to restore the unspent money in the 2027 budget, but until then, the national hubs are preparing on roughly half the expected public money, just as Taranto reaches Haskoning’s identified 2026 decision point.¹³ Contractors on enabling works, prospective concessionaires and developers relying on readiness dates should ask whether works are conditional on funding, what suspension and termination rights apply, and who bears the cost of re-phasing.

The Italian horizon: certainty is the missing ingredient

Developers, suppliers, ports and lenders all asked for the same thing: certainty. That means fixed auction dates, a credible pipeline beyond a single round, defined grid connection points and visible political backing. The advice from industry was also that auction design matters as much as timing. Price-only auctions tend to reward the bidders most willing to take risk rather than those most likely to deliver; prequalification and quality criteria are the tools to correct that and avoid the cases seen in Europe where projects were handed back.

Certainty also depends on how sites are chosen, and here Italy has a structural hurdle: at present it has no centralised system for selecting offshore wind sites for tender. Developers identify locations and carry out their own environmental assessments, which explains both the depth of the pipeline and its fragility. The problem is not insurmountable. Korea also began with developer-chosen sites, which led to overlapping claims and problems over site control. It then moved to a government-led roadmap with a grandfathering process allowing existing projects to opt in. For Italian developers that have already invested in permitting, how any such transition treats their existing sites will be important.

None of this has to be solved before the first auction, and waiting for a perfect framework carries its own cost. The AERO study frames the trade-off directly: delaying the auctions may allow Italy to buy the technology more cheaply once other markets have driven down costs, but delay is not a neutral choice. With timely auctions, the study estimates over €56 billion of added value for the local market, around 817,000 labour-years of employment and about €25 billion of tax revenue.¹⁴ A delayed path forfeits more than €31 billion of added value, including around €8 billion in manufacturing, as demand migrates to established foreign supply chains.¹⁵ For developers, fabricators and authorities, the priority is to start rather than wait until every question is resolved. Italy can draw on the lessons of the markets that went first and manage what remains through carefully considered agreements. The risks identified here, from hub delivery structures and port readiness to funding and interface risk, need not be resolved in advance, but they do need to be identified early and allocated deliberately in the contracts. Handled that way, they will determine not whether Italy builds, but how smoothly.

¹The European House – Ambrosetti, ‘Floating Offshore Wind Community’ (2 February 2024) <www.bluefloat.com/floating-offshore-wind-community/>; E. Faraggiana et al., ‘Floating offshore wind potential for Mediterranean countries’, Heliyon 10(3) (2024) e33948, <www.sciencedirect.com/science/article/pii/S2405844024099791 >.

²AERO-commissioned study, Politecnico di Torino, Intesa Sanpaolo, Politecnico di Bari, Prometeia and OWEMES, ‘Il ruolo strategico dell’eolico offshore nella competitività del Paese’ (10 June 2026) (“AERO Study”), p. 6.

³AERO Study, pp. 1 and 12.

⁴AERO Study, p. 12.

⁵AERO Study, pp. 46–47.

⁶AERO Study, pp. 49–50.

⁷UK Department for Energy Security and Net Zero, ‘Contracts for Difference Allocation Round 7 results’ (14 January 2026) <www.gov.uk/government/publications/contracts-for-difference-cfd-allocation-round-7-results/contracts-for-difference-allocation-round-7-results-accessible-webpage>. Floating (Pot 4): £155.37/MWh (2012 prices), £216.49/MWh (2024 prices), delivery year 2029/30. Fixed-bottom (Pot 3, England/Wales): £65.45/MWh (2012 prices), £91.20/MWh (2024 prices). Euro equivalent as reported by offshoreWIND.biz, ‘RWE secures almost 7 GW as UK awards 8.4 GW in “Europe’s Biggest Ever Offshore Wind Auction”’ (14 January 2026) <www.offshorewind.biz/2026/01/14/rwe-secures-almost-7-gw-as-uk-awards-8-4-gw-in-europes-biggest-ever-offshore-wind-auction>; exchange rates move. 20-year term: Linklaters, ‘What’s next for the UK’s CfD?’ <sustainablefutures.linklaters.com/post/102m2cv/whats-next-for-the-uks-cfd-looking-ahead-to-ar8>.

⁸Ministry proposal of 12 June 2026, as reported in Rinnovabili, ‘La settimana normativa: dalla doppia tariffa FER 2 per l’eolico alle semplificazioni per i data center’ (29 June 2026) <www.rinnovabili.it/mercato/politiche-e-normativa/doppia-tariffa-fer-2-eolico-semplificazioni-data-center/>. The proposal is yet to be submitted to the EU for review.

⁹GWEC Global Offshore Wind Report 2026, Market Status, p. 86 <https://www.gwec.net/reports/globalwindreport#Download>.

¹⁰FER 2 currently requires offshore wind projects to enter operation within 60 months of their auction ranking, with the tariff cut by 0.5% for each month of delay and the incentive lost altogether after nine months. However, it should be noted that both the timing to operation and tariff requirements are currently under review; see Ministerial Decree of 19 June 2024 (FER 2), art. 7; GSE Operating Rules approved by MASE directorial decree of 11 November 2025.

¹¹Haskoning’s timeline treats 7Seas Med’s 250MW project, the first Italian floating project to obtain its VIA decree, as the test case first project Taranto would assemble, with installation in 2031.

¹²European Investment Bank, project 20190354, ‘Ports Occitans’ (€150 million loan to the Région Occitanie, signed 12 April 2021; total project cost c. €343m), <https://www.eib.org/en/projects/all/20190354>.

¹³MASE, Direzione generale fonti energetiche e titoli abilitativi, note to the Port System Authorities of the Ionian Sea and Eastern Sicilian Sea (22 September 2026), as reported in ‘Più che dimezzati i fondi ai porti di Augusta e Taranto per l’eolico offshore’, Shipping Italy (22 September 2026); ‘Eolico offshore, il MASE taglia i fondi. Penalizzati i porti di Taranto e Augusta’, PPN ADI (23 September 2026); ‘Eolico offshore, fondi dimezzati per gli hub di Taranto e Augusta: Pichetto promette il reintegro nel 2027’, TarantoToday (24 September 2026).

¹⁴Figures are cumulative to 2080, under a scenario of 3.8 GW by 2033, 10 GW by 2040 and about 20 GW by 2050. The delayed scenario assumes the same installed capacity by 2050.

¹⁵AERO Study, pp. 62, 71–72.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.