Why choose UK floating wind over Irish fixed-bottom? The case for cross-border projects

Energy islands and hybrid projects may have taken centre stage as solutions to integrate Europe’s growing offshore wind fleet, but countries including the UK, Denmark and Germany are missing another obvious ‘win-win’ option right under their noses.

Amid Europe accelerating its offshore wind build-out, energy islands and hybrids are visionary means of integrating offshore wind generation and transmission into a flexible meshed grid.

But while these are central to unlocking Europe’s full offshore wind potential, it is equally important to also consider alternatives that deliver tangible progress within today’s technical, regulatory and commercial realities.

Cross-border projects offer such a solution, where an offshore wind farm in one country connects directly to the grid in another. They can enable faster deployment by tapping into underutilised sea space, reduce costs and potentially unlock higher revenue, all within existing frameworks.

The Danish-German case: A rare win-win

A compelling case for cross-border projects is for North Sea neighbours Denmark and Germany.

Dense clustering of sites in the German North Sea creates challenges. Aegir Insights’ study of 20 of these sites found that inter-farm wake effects could reduce average annual energy production (AEP) by up to 15% – the same output as a 4GW-plus offshore wind farm.

By contrast, Denmark offers ample areas for offshore wind, including zones just north of the German border.

Aegir Insights’ modelling shows that relocating the three German sites – N-12.4, N-12.5, and N-13.3 – to Danish waters, more specifically in the Ev8 site in the North Sea and the eastern site of Bornholm Energy Island in the Baltic Sea, could reduce LCOE by up to 17% and increase AEP by 3%.

Crucially, this would also reduce the external wake effects and boost output from the remaining German projects, which translates into billions of euros in additional lifetime revenue.

The Danish-German case is a rare win-win.

Germany gains access to cheaper and better-performing sites while improving the economics of the remaining German North Sea sites. Denmark, in turn, activates sites not slated for near term development, while preserving the option to later be upgraded to an energy island or hybrid asset.

Substituting UK floating with Irish fixed-bottom projects

A similar opportunity exists in the Irish Sea. Ireland has strong offshore wind potential but limited domestic demand. Meanwhile, the Celtic Sea in the UK requires floating wind, carrying much higher costs compared to bottom-fixed projects.

Our analysis shows that substituting one of the UK floating project development areas with Ireland’s bottom-fixed DMAP D site could cut LCoE by over 10%, raise AEP and could result in an increase in lifetime revenue of over 5%, if connected to the UK market.

Relative simplicity in a complex context

What makes cross-border projects stand out is their relative simplicity.

Unlike energy islands and hybrids, they don’t require complex technology nor new market model configurations. Many of the technologies needed for energy islands and hybrids, like multi-terminal HVDC and inertia-free grid control, are still under development or await standardisation.

Marketwise, the necessity of offshore bidding zones exposes developers to price and volume risks, as power prices will align to lowest-priced connected bidding zones, while constrained interconnectors can result in curtailment and a collapse of power prices in the offshore bidding zone.

Of course, cross-border projects are not without challenges, as they also require bilateral agreements and regulatory frameworks. However, the same holds true for energy islands and hybrids which, in addition, require above-mentioned deeper systemic innovation across both technical, regulatory and market dimensions.

To be clear, this is not a choice between cross-border projects and next-generation energy islands and hybrids. It’s a call to broaden the toolkit and give cross-border projects more attention as a pragmatic complement that can be delivered using existing technology, regulatory and market frameworks.

Encouragingly, since finalising our analysis, this line of thinking has gained traction. In June for example, Denmark and Germany renewed their energy cooperation, explicitly including cross-border offshore projects. Beyond Europe, regions like Nova Scotia are also prone to exploiting an export-oriented offshore wind approach, thus tapping into their significant offshore wind potential.

Based on our few examples, the case seems quite clear. If Europe – or other regions for that matter – wants to maintain a cost-effective offshore wind deployment, it must embrace not only visionary concepts, but also less ‘sexy’ immediately actionable solutions.

Cross-border projects offer exactly that by providing a practical, near-term solution that supports the long-term vision of offshore wind as a cornerstone in the future energy mix.