The World's #1 Renewable Energy Network for News, Information, and Companies.

Offshore Wind Costs To Fall 15 Percent by 2022

Based on an assumed installed capacity of 30 GW of offshore wind by 2022, and using in-depth studies by consultancy group BVG of more than 67 projects, the report shows how under the most favorable conditions, energy costs could fall to £0.10/kWh by 2022, although a cost of nearer £0.12/kWh is more likely. This will be despite future offshore wind farms being built ever farther from shore and in deeper waters. Looking to the future, it seems likely that costs will continue to follow in the period to 2022.

For the forseeable future, the UK is likely to be the largest market for offshore wind with a combined pipeline of nearly 50 GW of projects. What happens in this market is therefore likely to be replicated across other European regions, where offshore wind is expedcted to be the fastest growing source of renewable energy. 

Key areas highlighted for potential cost reductions are in operation and maintanence, improved power output and reliability of turbines. Upfront costs (capital expenditure) are expected to remain high for the forseeable future, unless there is an improvement in external factors, such as the cost of steel. Improvements in operational expenditure and energy yield are expected to be enough to reduce costs to the £0.12 / kWh mark within ten years.  

At the publication of the report at the UK Offshore Wind Conference in Liverpool, some commentators expressed concerns about the slow pace of change outlined. Responding to the criticism, members of the panel, which included companies such as Vestas, Areva and Siemens, defended the wind industry's record on cost reductions, saying that the long lead-in time on offshore wind projects meant that innovations being developed now would take many years to enter commercial development. They also claimed that the offshore wind sector needed time to mature, saying that every time a new technology was developed, the supply chain needed time to catch up, bringing things back to the prototype stage and raising costs.  

The large scale deployment of offshore wind in the UK would bring huge benefits, including up to £60 billion ($100 billion) in industrial development and an additional £14 billion ($22.4 billion) in government revenue between 2011 and 2022. At the same time emissions of carbon dioxide could be reduced by up to 800 million tonnes of CO2 over the same period.   

Despite the upbeat tone of the report, its findings also underline the vulnerability of the offshore wind sector. Rising steel prices or fluctuations in the exchange rate could wipe out these cost reductions, as could the withdrawal of political support for the industry. Political stability has been a key request from manufacturers and developers. There is a huge amount of money ready to flow into offshore wind in Northern Europe, and it is up to the region's governments to ensure that they get it right.

RELATED ARTICLES

First Anniversary of The Balkan Floods Highlights Renewable Energy Market Opportunities

Ilias Tsagas, Contributor One year ago this month, severe flooding in Serbia, Bosnia-Herzegovina and Croatia killed 79 people, displaced about half a million and caused economic paralysis of the region. In the wake of these the catastrophic events, ...
Canadian Climate Goals

Canada Announces Weak Climate Target

Danielle Droitsch, NRDC Last week, Canada has announced its contribution to the global effort to reduce greenhouse gases by announcing its post-2020 target. The target announced today is off-track to the 80 percent cut by 2050 they committed to in...
Wind turbine

Forget the PTC, Wind Energy’s Real Problem Is Transmission

Adam Barber, A Word About Wind

Forget the challenges associated with government tax credits.  Do you want to know the real barrier for future North American wind market growth?

Rooftop Solar Panels

Hypocrisy? While Buffett Champions Renewables, His Company Fights Rooftop Solar

Mark Chediak, Noah Buhayar and Margaret Newkirk, Bloomberg Warren Buffett highlights how his Berkshire Hathaway Inc. utilities make massive investments in renewable energy. Meanwhile, in Nevada, the company is fighting a plan that would encourage more residents to use green power.
MushyPea is a UK-based writer and campaigner on environmental issues. Particular interests include wildlife conservation, climate change and renewable energy.

CURRENT MAGAZINE ISSUE

03/01/2015
Volume 18, Issue 3
file

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @megcichon @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in Brazil – in partnership with GWEC, the Global Win...

Brazil is one of the most promising markets for wind energy.  Ranke...

Energy Storage USA 2015

Energy Storage USA is the leading conference in the United States focuse...

Wind Power Central America

Wind power projects are expected to reach 46GW of total installed capaci...

COMPANY BLOGS

SunEdison Expands Residential Market Offerings with New PPA, Sales ...

SunEdison has largely focussed on the commercial and utility-scale solar...

Are You Ready for a Natural Disaster?

Guest post by Jenna Clarke  Living in the Shenandoah Valley of Virg...

Deadline for Inclusion in Solar Power World's Top Solar Contractors...

UPDATE: The official deadline for the Solar Power World T...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS