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Cost of offshore wind tumbles as Humber wins big again

Offshore wind's tumbling price has been welcomed across the board as the Humber celebrates two more projects nearing realisation. 

Cost of offshore wind tumbles as Humber wins big again

Now cheaper than nuclear and gas thanks to a dramatic fall as the sector has matured, Dong Energy's Hornsea Project Two strike price - £57.50 - has come in at nearly half the last auction round in early 2015. 

The 47 per cent drop is being roundly celebrated, with the next project to be anchored in Grimsby and Hull for operations and construction / assembly, came in at £57.50 per megawatt hour. 

Triton Knoll, to be delivered a year earlier than Hornsea in 2021/22 came in at £74.75. Prices are guaranteed for 15 years of an expected project life of 25 years.

The offshore wind prices announced are cheaper than the cost of the 35-year contracts for new nuclear power of £92.50 per megawatt hour, and cheaper than the levelised cost of gas, according to figures from the Department of Business, Energy and Industrial Strategy.  

​Hornsea 2 and a third wind farm announced in the round, Moray in Scotland, will begin generating in 2022/23.

Welcoming the results, RenewableUK’s chief executive Hugh McNeal said: “We knew the results would be impressive, but these are astounding. 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.

"These results are further proof that innovation in the offshore wind industry will bring economic growth for the UK on an industrial scale. The UK needs to establish new trading opportunities as we leave the European Union, and the UK’s offshore wind sector is a world leader in a global renewable energy market currently worth $290 billion a year.

“Today’s results mean that both onshore and offshore wind are cheaper than gas and nuclear. 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.

“Congratulations to the successful bidders: DONG Energy for Hornsea 2, Innogy and Statkraft for Triton Knoll and EDPR for Moray. These projects are the powerhouses of the future.

“It’s great to see these excellent results for offshore wind. It’s important that innovative renewable technologies, including wave energy and tidal energy projects also have a route to market, so different mechanisms are needed to ensure these cutting-edge technologies can develop. Tidal energy projects are already showing cost reductions and with the right encouragement can undergo the same sort of journey as offshore wind. Onshore wind is the cheapest from of new power, so it deserves an opportunity to compete too."

News Courtesy: www.humberbusiness.com

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