Offshore wind on track to become cheaper than gas power within five years

Industry-commissioned study details how offshore wind is on a steep cost reduction curve that should allow new projects to compete with new gas power plants.

E.ONs Scroby Sands offshore wind farm

Offshore wind projects going into construction in 2020 could deliver clean power at a cost that is lower than that delivered by new gas-fired power plants.

 

That is the key conclusion from the latest industry-backed study to explore the sharp reduction in offshore wind costs that has been achieved in recent years, as the sector strives to meet a government target of cutting costs to under £100/MWh by the end of the decade.

 

The new report from consultancy BVG Associated was commissioned by renewable energy developer Statkraft and details how the offshore wind sector could comfortably beat the £100/MWh goal.

 

"Real, tangible advances in technology, the supply chain, and policy have combined to drive down the cost of energy for projects about to go into construction in 2015," the report states. "This downward pressure is expected to continue, with offshore wind projects going into construction in five years that are competitive with new CCGT (combined cycle gas turbine) plant."

 

The report argues that repowering existing projects with larger turbines during the 2020s will slash the cost of offshore wind power delivering "offshore wind plant that is cheaper than CCGT, even under the Government's lowest gas price forecast".

 

"This is a radical step towards 'subsidy' free offshore wind and will enable the UK to continue to decarbonise through the 2020s, cost-effectively," the report argues.

 

The report comes as the government is poised to announce a major shake-up of renewable energy subsidies, which industry insiders fear could deliver a serious blow to the UK's offshore wind investment programme.

 

As well as highlighting the rapid pace of cost reduction, the report also argues the offshore wind industry can deliver a wide range of economic and employment benefits.

 

"Offshore wind has... driven significant inward investment and renewable energy jobs and growth and has the potential to deliver much greater benefits in the long term and contribute to re-balancing the UK economy," the report states. "Most of this activity will be focused in the Northern Powerhouse and in coastal areas with traditionally high levels of unemployment."

 

Read More: Business Green

 

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