In the latest round of Contracts for Difference (AR7) auction in the UK, the winning bid for floating offshore wind power remains significantly higher than that for fixed-bottom installations, exceeding it by more than double. At 2024 prices, fixed offshore wind power is approximately £90/MWh, while floating wind power stands at around £216/MWh. At first glance, this appears to be an economically unviable policy choice. However, when viewed through the lenses of physical fundamentals, power system operations, and long-term industrial strategy, floating wind power can be seen as a deliberate upfront investment rather than merely an expensive electricity purchase.
To begin with the most basic physical principles, the available power from wind generation is proportional to the cube of wind speed. A mere 10% increase in wind speed can theoretically yield a 30% increase in electricity generation. The key advantage of floating wind power lies not in the efficiency of individual turbines but in its ability to deploy wind farms in deeper and more distant waters, where winds are stronger, more stable, and turbulence is reduced, resulting in a higher capacity factor. This cubic relationship dramatically amplifies the value of high-quality wind sites, providing a clear and solid physical basis for floating wind power to ‘catch up with or even surpass’ fixed-bottom costs in the long term.
So why is it still so expensive at this stage? The reason lies not in physical limitations but in engineering and scale. Floating wind power requires additional floating structures, mooring and anchoring systems, dynamic cables, and more complex design validation and construction arrangements. In contrast, fixed offshore wind power has undergone over a decade of scaled development, resulting in a mature supply chain and standardized engineering practices. Floating wind power, however, is still in the early stages of industrialization, with fewer projects, dispersed designs, and high financing costs, leading to naturally higher electricity prices. This situation is strikingly similar to that of fixed offshore wind power over a decade ago.
Another pragmatic reason for the UK’s early investment is the geographical and resource limitations. Fixed offshore wind power relies on relatively shallow seabeds, and suitable nearshore sites for construction are not infinite. To continue significantly expanding zero-carbon electricity after the 2030s, new wind energy resources will primarily come from deeper waters, such as the Celtic Sea between southwestern England and Ireland, as well as the offshore regions along Scotland’s west coast and the Atlantic edge. Without floating technology, the vast wind energy resources in these areas would be nearly impossible to exploit, and the expansion of the UK’s offshore wind power would soon hit a natural ceiling.
From the perspective of the power system, deploying some wind capacity in further offshore areas with different climatic characteristics also enhances overall supply resilience. Deepwater wind farms are less affected by land friction, have higher average wind speeds, and their variations are not fully synchronized with those of nearshore and onshore wind farms in the North Sea. This spatial dispersion effect can significantly reduce the frequency and severity of simultaneous low-wind periods across large areas, resulting in a smoother overall output curve and reducing reliance on gas backup and short-term storage. These system-level benefits may not be directly reflected in the winning bid prices of individual projects but will gradually emerge in the risk and cost structure of the entire power system.
At the same time, floating wind power carries a clear vision for industry and exports. Fixed offshore wind power is already highly mature, with intense supply chain competition, leading to a dilution of added value. In contrast, floating wind power is still in its formative stage, with many engineering and standards yet to be finalized, including platform structures, mooring solutions, dynamic cables, and port and vessel support. This presents an opportunity for the UK to smoothly transition the offshore design, construction, and professional service capabilities accumulated during the North Sea oil and gas era into the zero-carbon industry. As technology matures in the 2030s, the UK not only can use these solutions domestically but also has the potential to export a complete floating wind power solution to other deep-water countries, establishing a long-term and high-value export advantage.
Many energy research institutions and engineering consultants also point out that the high costs of floating wind power are not a long-term state. As installed capacity expands, platform designs become standardized, and supply chains and port infrastructure take shape, coupled with a decrease in financing costs driven by reduced technical risks, the generation costs of floating wind power are expected to decline significantly in the 2030s. More optimistic industry roadmaps even anticipate that, after large-scale deployment, the electricity prices for floating wind power could drop to the range of £50–£100/MWh; even under more conservative assumptions, a gradual decline towards £100/MWh is widely expected, aligning more closely with mature fixed offshore wind power. In other words, the contracts that seem expensive today are more like an entry fee for the next cost leap.
In summary, while floating wind power may appear ‘more than double the price’ today, it is actually paying upfront costs for greater wind energy resources, a more stable power system, and an industry pathway with export potential. For the UK, the question has never been whether it is the cheapest option today, but whether, without investment today, there will still be choices ten years from now.
