The London Array will have 3.6MW turbines like this one, shown with one of the project's offshore substations (credit London Array)

Offshore wind cost 'can be competitive' says industry

The cost of offshore wind energy could be cut by as much as 30 per cent according to an industry-led report.

The report builds on detailed evidence in a study by The Crown Estate to show how reductions can be achieved, setting out specific actions to drive costs down.

“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,” said Maria McCaffery, chief executive, RenewableUK.

“We are ready to play our part to encourage the industry to follow the recommendations in the report.”

Such a cut would see the cost of delivering 18GW of electricity from offshore wind farms - around 20 per cent of the UK’s total electricity demand - drop from £140/MWh today to £100/MWh by 2020, saving over £3 billion a year and making offshore wind more cost-competitive with other forms of energy generation such as nuclear and carbon-abated fossil fuels.

The Task Force report charts 28 specific recommendations on how the industry can reduce the cost of generation.

In particular, 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 be transformative in lowering cost and improving working practices.

“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,” said Energy Minister Charles Hendry.

Published in parallel with the Task Force study, the separate report by The Crown Estate, which manages the seabed around the UK, also supported the view that a major cost reduction by 2020 was possible, saying that producing more efficient turbines was the main driver for cheaper wind farms.

Overall, the cost of building an offshore wind farm in 2020 could fall by 39 per cent, this report said, largely through development of larger and more reliable types of wind turbines.

More intense competition among turbine manufacturers, support structure providers and installers in the UK and the rest of Europe could also help reduce costs by as much as six per cent.

Rob Hastings, Energy & Infrastructure Portfolio Director of The Crown Estate said: “We believe that there is no single solution to reduce the cost of offshore wind and all participants in the sector need to play their part.”

The two reports were launched jointly at the Global Offshore 2012 conference in London, organised by RenewableUK.

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