United Kingdom

United Kingdom

Offshore cost of energy drops 11%

UK: A new government and industry report has shown the cost of energy for offshore wind projects in the UK has fallen 11% between 2011 and 2014.

A Siemens 6MW turbine being installed at Dong Energy's Westermost Rough
A Siemens 6MW turbine being installed at Dong Energy's Westermost Rough

The Cost Reduction Monitoring Framework, published this week, said prices across the lifetime of a project have fallen to £121/MWh (€166/MWh) from £136/MWh (€186/MWh) in 2011. The government is targeting £100/MWh (€137/MWh) by 2020.

The report concluded the move to larger 6MW-plus turbines and larger monopiles were the main reasons behind the cost cut.

The Offshore Wind Industry Council (OWIC) commissioned the report in 2014 in partnership with the Offshore Renewable Energy Catapult (ORE Catapult) and the Crown Estate. Data was gathered by Deloitte and DNV GL.

OWIC released another report in November highlighting the barriers facing the UK's supply chain. It found a number of issues, such as the difficulties facing new entrants without a track record, a requirement for greater transparency in the order pipeline and a need for more collaboration within the sector.

The new report states the continued drop in price will be dependent on continued investment in the supply chain and more confidence in size of the sector beyond 2020.

OWIC also warned that deeper water solutions, such as gravity-based foundations and HVDC connections, were not being developed quickly enough.

ORE Catapult said the drop in price was in line with the prices seen yesterday in the new contracts for difference (CfD) awards. 

Two offshore projects secured the subsidy at an average price of £117.14/MWh (€160/MWh)

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