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United Kingdom

National Grid sees subsidy-free offshore wind by 2040

UK: In its 2017 Future Energy Scenarios (FES) report, the UK's transmission operator, National Grid, predicts offshore wind could be subsidy free in the UK before 2040.

Offshore wind could be subsidy-free in the UK before 2040, according to the most ambitious scenario
Offshore wind could be subsidy-free in the UK before 2040, according to the most ambitious scenario
The report sets out four pathway scenarios of varying ambition for the UK's energy future to 2050. In its most ambitious pathway, named two degrees, National Grid suggests offshore wind may reach a subsidy-free level.

"The majority of growth is seen in offshore wind, which, as a less mature technology, has greater potential for further cost reductions.

"Offshore wind currently receives support through the contracts for difference mechanism, however ‘two degrees’ assumes considerable offshore build without subsidy, reflecting falling costs," the report stated.

The two degrees scenario shows the cost optimal pathway to meet the UK's 2050 carbon emissions reduction target.

"All scenarios anticipate a growth in wind capacity, from approximately 15GW in 2016 to 26GW in 'steady state' [least ambitious pathway] and just less than 50GW in 'two degrees' by 2040," the report adds.

"Both onshore and offshore wind experience continued technological improvements, associated cost reductions, and new opportunities to co-locate assets with storage, all of which leads to growth," according to National Grid.

With the addition of wind on the system, National Grid recognised the growing importance of storage and balancing systems.

"As traditional sources of energy supply are replaced by new ones, and demand becomes more dynamic, the energy system will be more complex to manage. Responsive balancing products and services will be needed to deliver flexibility across both the electricity and gas systems," the report states.

The report also finds the UK's energy demand is set to increase beyond 2030, as the growth of electric vehicles increases.

Trade body RenewableUK said that growth in demand should and could be met by renewables.

"The surge in electricity demand envisaged by National Grid to power electric vehicles will need to be met by a wide range of clean sources, including onshore and offshore wind, wave and tidal energy, if we're to meet our carbon reduction commitments and deliver the modern energy system that consumers need," said RenewableUK executive director Emma Pinchbeck.

"It's worth noting that National Grid's new two degrees scenario is the only one in which the UK's vital carbon reduction goals are met. This could be more ambitious, as the Paris Agreement aims to limit the global temperature increase even further to 1.5 degrees," Pinchbeck added.

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