The UK is on course to substantially reduce the cost of electricity from offshore wind over the next seven years. That’s the conclusion of a report by the industry-led Offshore Wind Cost Reduction Task Force.
The report builds on detailed evidence in a study by the Crown Estate, demonstrating how reductions can be achieved and setting out actions to drive costs down by more than 30%.
The government wants to see up to 18GW of electricity delivered from offshore windfarms (20% of the UK’s total electricity demand) by 2020. The cost of delivering this is now expected to drop from £140/MWh to £100/MWh, saving more than £3 billion a year.
In achieving this, offshore wind will take another big step towards becoming fully competitive with other forms of energy, such as nuclear power.
Slashing the costs of offshore wind will also help to create jobs and attract investment, as well as deliver secure energy supplies, said the report.
Energy minister Charles Hendry said: “Offshore wind will be a vital part of a diverse and secure low-carbon energy mix in the decades ahead. But we are clear that costs must come down.
“I am encouraged that this report shows that substantial cost savings can be achieved if action is taken and I welcome this valuable work. I look forward to working closely with industry to take this forward further and deliver these ambitious targets.”
Maria McCaffery, chief executive of RenewableUK, said: “By committing to slash the costs of developing offshore wind the UK has once again demonstrated why it is the world leader in this industry. RenewableUK is ready to play its part to encourage the industry to follow the recommendations in the report.”
The report lays out 28 recommendations on how the industry can reduce the cost of generation, covering the supply chain, innovation, contracting strategies, planning and consenting, finance and the grid.
The task force has highlighted that more efficient contracting and the concept of “alliancing”, used successfully by the North Sea oil and gas industry to reduce risk and bring down costs, have the potential to lower costs and improve working practices.
The report also calls for industry and government to work more closely together to address barriers as they arise. A programme board will be established to do this.
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