The cost of power from offshore wind farms has fallen by a third in five
years, a report has shown.
Energy prices for offshore wind have fallen 32% since 2012, and are now
below the target agreed by Government and industry of £100 per megawatt
hour (MWh), four years ahead of 2020 date set to achieve the goal.
The industry said it was “well on the way” to being cost-competitive with
other sources of power generation.
Schemes making final investment decisions in 2015/2016 were doing so with a
cost of energy of £97/MWh, compared with £142/MWh five years earlier, the
third annual cost reduction monitoring framework (CRMF) report shows.
The fall in price is down to the adoption of larger turbines, increased
competition and lower cost of capital, according to the report from the
Offshore Renewable Energy (ORE) Catapult on behalf of the Offshore Wind
Programme Board (OWPB).
Installing fewer, larger turbines reduces operational and maintenance
costs, with the newest 8MW units providing enough electricity to meet a
household’s power needs for more than a day from just one rotation of the
blades, the industry says.
UK energy minister Jesse Norman said: “The UK’s leadership in offshore wind
clearly demonstrates that it is an attractive destination for renewable
energy investment.”
He said the industry would be an important part of the Government’s new
industrial strategy outlined on Monday, and would be underpinned by £730
million of annual support for renewables over the course of the parliament.
“Thanks to the efforts of developers, the UK’s vigorous supply chain and
support from Government, renewables costs are continuing to fall.
“Offshore wind will continue to help the UK to meet its climate change
commitments, as well as delivering jobs and growth across the country,” he
said.
Co-chairman of the Offshore Wind Industry Council (OWIC) Benj Sykes said
offshore wind was a “big success story at the very heart of the UK’s
industrial strategy”.
“The industry is cutting costs much faster than predicted, while creating
thousands of jobs and stimulating investment nationwide. But this is a
story that is just beginning.
“We remain committed to delivering further significant cost reduction,
while working in partnership with Government to put in place a sector deal
and build a sustainable industry that will benefit the UK for decades to come.
“Our industry’s goal is to be cost-competitive with other generation
sources, and this new data shows that ambition is realistic and that we are
well on the way to achieving it.”
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