Cost of offshore wind energy falls by more than 10% in three years

Offshore wind general Govt picBy DARA BUTTERFIELD

A report published recently by the Offshore Wind Programme Board shows that the cost of energy from offshore wind farms has fallen by almost 11% over the past three years.

The achievement is ahead of schedule on its path to delivering the UK Government’s target of £100/MWh by 2020, and is cited as clear evidence that offshore wind can play a significant role in the UK’s sustainable energy mix in the coming decades.

Benj Sykes, Co-Chairman, Offshore Wind Industry Council (OWIC), said: “Our Cost Monitoring work as well as recent strike -price announcements demonstrate that the industry is making rapid progress in bringing costs down, ensuring that offshore wind can play a central role in the UK’s future energy mix. As an industry we remain committed to continuing our work to drive costs down further in the coming years.

“The OWIC welcomes this report on the Cost Reduction Monitoring Framework, and the evidence that it provides of UK industry’s concerted efforts to drive down the cost of energy from offshore wind.

“Offshore wind is a UK success story. It is already providing enough power for 2 million UK households and thousands of UK jobs. But continued success requires ongoing cost reduction, and this report provides good news on the progress being made in delivering more affordable clean energy. It is crucial to understand that future progress will depend upon confidence in Government’s support into the next decade, as well as ongoing innovation and industry cooperation. Thanks go to the Offshore Wind Programme Board and ORE Catapult for this important piece of work”.

The report charts progress between 2011 and 2014 on cost reduction and is measured in lifetime costs. It showed that the lifetime cost of energy from offshore wind has come down from £136/MWh in 2011 to £121/MWh for projects moving to construction between 2012 and 2014 and that the biggest single contribution to cost reduction has been industry’s early adoption of larger turbines.

Andrew Jamieson, Chief Executive, ORE Catapult – which is headquartered in Glasgow said “Our CRMF report not only demonstrates excellent progress made in just a few years in making offshore wind a more cost-competitive, sustainable secure source of energy, but also illustrates the technology innovations and efficiencies required to deliver the targeted £100/MWh. Significant challenges lie ahead for the entire industry, and continued progress will require ever greater collaboration between industry, government and academia.”

The report makes a number of recommendations on actions required to continue the reduction in costs for offshore wind, including:

  • Clarity is needed on the future programme and scale for offshore wind in the UK. Industry investors and supply chain innovators need the market opportunity to be clearly illustrated, such that sufficient investment can be attracted to reduce costs and support industrialisation.
  • New technologies for deeper water sites, e.g. foundations and electrical connections, are not being developed quickly enough. Opportunities to demonstrate these technologies should be facilitated by the offshore wind Industry.
  • Rapid technology innovation means that a significant amount of uncertainty continues to be priced into projects. This can be overcome by increased collaboration and better monitoring to increase data availability and improve analysis tools.
  • More focus is required to identify and address the gaps in skills and expertise required to deliver and operate offshore wind farms.
  • Industry needs to continue work on standardisation of key components, such as sub-stations, to minimise duplication.

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