Published: Thu, September 14, 2017
Economy | By Melissa Porter

Offshore wind power now cheaper than nuclear for first time

Offshore wind power now cheaper than nuclear for first time

Danish offshore wind firm DONG Energy (DENERG.CO) was awarded a contract to build 1.4 gigawatt (GW) capacity at its Hornsea 2 wind power project during a British auction for renewables, creating the world's largest offshore wind farm.

Hornsea 2 and Moray will begin generating in 2022/23 at £57.50 per megawatt hour, and Triton Knoll in 2021/22 at £74.75/MWh, with prices guaranteed for 15 years of an expected project life of 25 years.

"We've placed clean growth at the heart of the industrial strategy to unlock opportunities across the country while cutting carbon emissions", said minister for energy and industry, Richard Harrington.

The Hornsea Project Two offshore wind farm will be located approximately 89 kilometres from the Yorkshire coast and have a total capacity up to 1,386MW, producing enough electricity to power over 1.3 million United Kingdom homes. The contest was for "less-established technologies" such as offshore wind, tidal and anaerobic digestion.

McNeal thinks the renewable industry can go further in providing cheaper energy if the government continue to hold fiercely competitive auctions for future projects.

This bid is a victory for offshore wind energy as it signals a monumental shift in the energy economy of the UK. "If you look at what's happened to offshore wind in the last 10 years, it's an fantastic British success story".

The strike prices awarded to the three projects are on average 47% lower for offshore wind than in the first CfD auction in 2015, R-UK said. This corresponds to what seven of the largest offshore wind turbines today can generate in a single year - or what DONG Energy's largest project to date, Hornsea One, can generate in 17 days.

Technological developments such as bigger turbines and the growth in the United Kingdom supply chain have helped contribute to the falling prices. At this record low price, offshore wind power is a great deal for United Kingdom energy.

However, the nuclear industry said that because wind power is intermittent, nuclear energy would still be needed.

Leonie Greene, head of external affairs at the Solar Trade Association (STA), told pv magazine that the results demonstrate that offshore wind is now a mature technology and demonstrates the cost reductions the renewable sector can deliver when given stable, long-term policy framework and clear political commitment.

Britain needs to invest in new power capacity to replace aging coal and nuclear plants due to close in the 2020s.

"The offshore wind sector alone will invest £17.5bn in the United Kingdom up to 2021 and thousands of new jobs in British businesses will be created by the projects announced today", he said in a statement.

Like this: