United Kingdom

United Kingdom

Bigger turbines essential to slash offshore costs

UNITED KINGDOM: Cutting the cost of UK offshore wind to £100 (EUR125) per megawatt hour can only be achieved by investing in bigger turbines, creating a more robust supply chain and "derisking the sector" to attract finance, according to two industry reports.

Big turbines... Sway's 10MW turbine is currently in development
Big turbines... Sway's 10MW turbine is currently in development

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The Offshore Wind Cost Reduction Task Force Report, created by a collaboration of senior industry figures in the UK offshore wind sector at the behest of the UK government, offers 28 recommendation to achieve a 30% cut in offshore wind energy by 2020, from the current £140/MWh to below £100/MWh, lower than nuclear, see below.

The findings build on the report, Offshore Wind Cost Reduction - Pathways Study, published in May by the Crown Estate - which owns and manages the UK seabed - with the participation of a broad swathe of industry expertise. The Crown Estate analysis shows in detail how offshore costs could be cut by as much as 39% by 2020.

Robert Hastings, Crown Estate director of energy and infrastructure, said the cuts are achievable but there is no silver bullet to get there. He pointed out that the £100/MWh cost of energy target is an average. "Some sites will have higher costs than others. Far-shore could have higher costs," he said.

According to the Crown Estate report, almost half of the savings would be made by introducing new, larger turbines that are more reliable, capture more energy and have lower operating costs.

Andrew Jamieson, chair of both the cost reduction task force and industry body RenewableUK, agreed that developing larger turbines is key. "Through to 2020 you're looking at 6-7MW (turbines)," he said. "(In) the next decades they will be bigger."

Securing better lending terms for project finance would also play an important role in reaching the £100/MWh goal, Jamieson added. But finance cost will only come down when the financial sector feels the risks involved are significantly reduced, he said.Developers should be educating the financial sector about offshore wind in order to sell itself, Jamieson suggested.

The Crown Estate report also identifies a more robust and competitive supply chain as essential to bring down costs, and calls for better collaboration between the supply chain and developers, and among developers themselves, in order to share best practice.

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