RenewableUK has published an independent report showing that the overall cost of generating energy from offshore wind is set to fall significantly over the next ten years.
The new study, “Offshore Wind – Forecasts of Future Costs and Benefits”, compiled by independent technical consultants BVG Associates for RenewableUK, examines the most important measure for the offshore wind industry - the whole-life costs of projects - due to be built from 2011 to 2022. The whole-life cost includes capital expenditure, operational costs and the energy yield from offshore wind farms. The whole-life cost of energy from UK offshore wind projects is expected to be driven down by more than 15% in real terms between 2011 and 2022, under normal market conditions. Under favourable conditions, the decrease in costs would be as much as 33%. With a cumulative installation of more than 20GW by the end of 2020, the report shows that:
The new study, “Offshore Wind – Forecasts of Future Costs and Benefits”, compiled by independent technical consultants BVG Associates for RenewableUK, examines the most important measure for the offshore wind industry - the whole-life costs of projects - due to be built from 2011 to 2022. The whole-life cost includes capital expenditure, operational costs and the energy yield from offshore wind farms. The whole-life cost of energy from UK offshore wind projects is expected to be driven down by more than 15% in real terms between 2011 and 2022, under normal market conditions. Under favourable conditions, the decrease in costs would be as much as 33%. With a cumulative installation of more than 20GW by the end of 2020, the report shows that:
- UK offshore wind capital expenditure (CAPEX) per MW of installed capacity will continue to increase in the next few years as projects are located further offshore and in deeper water. However, technological developments will offset the costs incurred by these conditions, so that costs will improve in the decade ahead.
- Operational expenditure (OPEX) per MW installed will decrease significantly over the lifetime of wind farms installed in the next decade, primarily due to the use of a smaller number of larger and more reliable turbines.
- The move to sites further offshore will give access to improved wind resources. This will increase the energy yield per MW installed by more than a fifth between 2011 and 2022.
- However, the report warns that reduction in costs could be lost if a lack of Government ambition fails to stimulate competition and innovation.
- The report concludes that the installation of offshore wind farms between 2011 and 2022 will support more than 45,000 long-term jobs, and add approximately £60 billion to the UK economy through development, manufacture and installation activities.