Economy

Offshore wind slashes United Kingdom cost reduction goals ... now cheaper than new gas

Offshore wind slashes United Kingdom cost reduction goals ... now cheaper than new gas”

Scottish Renewables said energy from offshore wind in the United Kingdom was due to be cheaper than electricity from new nuclear power for the first time.

The Department for Business, Energy and Industrial Strategy's figures were released after an auction for subsidies, in which the lowest bidder wins.

Costs are about half of what they were just two years ago.

Further, these new offshore wind strike prices are cheaper than the levelized cost of gas, according to figures from the BEIS - for gas projects meant to start generating in 2020 and 2025 (source/PDF).

"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".

Those prices have tumbled to £74.75 (RM415) per megawatt hour for projects deliverable in 2021/2022, and to £57.50 for projects due in 2022/2023.

The price of building offshore windfarms has fallen by almost a third since 2012 as the technology matured, and developers believe that a new generation of even bigger turbines mean they can achieve further cost reductions in coming years. Compare £57.50 with the subsidy secured by new nuclear plant Hinkley Point C, which is £92.50, or around $122, per megawatt-hour.

The nuclear sector argues that offshore wind is one part of solving the UK's energy challenge through a low carbon future.

Wind wind power wind energy energy renewable energy offshore wind offshore wind power offshore wind energy offshore wind farm offshore wind farms wind farm wind farms United Kingdom wind turbine wind turbines

Wind and solar production have the drawback of being unpredictable, with countries needing to call on gas, coal or nuclear plants to raise output if there is no breeze or sun.

Earlier this year, energy research firm Westwood Global Energy Group predicted that global offshore wind energy capacity will increase fivefold between 2017 and 2025.

"The government's undying commitment to new nuclear risks locking us into sky-high prices for years to come", Lucas warned.

Unsurprisingly, most of the talk is now focused on Hinkley Point - nuclear energy being always considered the most controversial of energy generation technologies.

A project led by the University of Strathclyde and Chongqing University will look to use virtual prototyping in the design and optimization of the mechanisms that convert energy absorbed by wave energy generators into useable electricity.

"However, it does beg the obvious question of where a £57.50 strike price leaves other nascent technologies, such as tidal and wave, which are probably not economically viable at that level".

The Green party said the results should sound the death knell for Hinkley Point C, which is being built by EDF in Somerset.

Nevertheless, Ware added it was "a big step forward in the transition to a renewable (energy) grid".



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