A new report has revealed that the cost of power from offshore wind farms in the UK has fallen by a third in five years.
The report, produced by the Offshore Renewable Energy Catapult for the Offshore Wind Programme Board, said energy prices for offshore wind have fallen 32% since 2012, and are now below the target agreed by Government and industry of £100 per megawatt hour (MWh), four years ahead of 2020 date set to achieve the goal.
It is expected that there would be further reduction in the cost set by any other large-scale, low carbon energy source.
The target of £100/MWh was set in 2012 and was to be achieved by 2020.
And offshore wind farms with final investment decision during 2015/16 had already achieved cost lower than the target. The average Levelised Cost of Energy (LCOE) of £97/MWh, compared to £142/MWh in 2010/11.
As per the report, cost reductions could be achieved thanks to the adoption of larger turbines, increased competition and lower cost of capital.
The report said the offshore wind industry is now aimed at reducing costs further, creating jobs and growth in the sector.
The reduction in the cost was tracked and reported in the third annual Cost Reduction Monitoring Framework (CRMF) report delivered by Offshore Renewable Energy (ORE) Catapult on behalf of the Offshore Wind Programme Board (OWPB).
UK Energy Minister Jesse Norman said: “The UK’s leadership in offshore wind clearly demonstrates that it is an attractive destination for renewable energy investment.
“This growing industry will be an important part of the Government’s new industrial strategy, and will be underpinned by £730m of annual support for renewable energy over the course of this Parliament.
“Thanks to the efforts of developers, the UK’s vigorous supply chain and support from Government, renewables costs are continuing to fall.
Offshore wind will continue to help the UK to meet its climate change commitments, as well as delivering jobs and growth across the country.
”Offshore Wind Industry Council (OWIC) co-chair Benj Sykes said: “Offshore wind is a big success story at the very heart of the UK’s industrial strategy. The industry is cutting costs much faster than predicted, while creating thousands of jobs and stimulating investment nationwide.
“But this is a story that is just beginning. We remain committed to delivering further significant cost reduction, while working in partnership with Government to put in place a Sector Deal and build a sustainable industry that will benefit the UK for decades to come.
“Our industry’s goal is to be cost competitive with other generation sources, and this new data shows that ambition is realistic and that we are well on the way to achieving it.”
Image: Burbo Bank offshore wind farm in the UK. Photo: Courtesy of Offshore Renewable Energy.