RenewableUK, the UK’s renewable energy trade association, highlighted the dramatic fall in the cost of offshore wind. These results were announced in the country’s most recent competitive auctions for new contracts to provide clean electricity.
The cost of offshore wind has plummeted since the last competitive auction results were announced in February 2015, with the new prices on average 47% lower than they were just over two and half years ago. The offshore wind prices are also now cheaper than the cost of the 35-year contracts for new nuclear power (of £92.50 per megawatt hour), and cheaper than the levelized cost of gas.
The Department for Business, Energy and Industrial Strategy has announced that three offshore wind projects were successful, as they put in the lowest bids for Contracts for Difference (CfDs). The winning projects are DONG Energy’s Hornsea 2 off the coast of Yorkshire, Innogy and Statkraft’s Triton Knoll off the coast of Lincolnshire, and EDPR and ENGIE’s Moray off the northeast coast of Scotland.
The new wind farms, with a total capacity of 3,196 MW, will power the equivalent of more than 3.3 million homes.
“We knew today’s results would be impressive, but these are astounding,” said RenewableUK’s Chief Executive Hugh McNeal. “Record-breaking cost reductions like the ones achieved by offshore wind are unprecedented for large energy infrastructure. Offshore wind developers have focused relentlessly on innovation, and the sector is investing £17.5bn into the UK over the next four years whilst saving our consumers money.”
Hornsea 2 and Moray will begin generating in 2022/23 at £57.50 per megawatt hour, and Triton Knoll in 2021/22 at £74.75/MWh, with prices guaranteed for 15 years of an expected project life of 25 years.
“Today’s results mean that both onshore and offshore wind are cheaper than gas and nuclear,” added McNeal. “But this young, ambitious industry can go even further. The Government can help us by continuing to hold fiercely competitive auctions for future projects, as it has promised, and by putting offshore wind at the heart of its upcoming Industrial Strategy.
Filed Under: News, Offshore wind, Projects