Member Article

Government to slash costs for offshore wind

The UK is on track to substantially reduce the cost of electricity from offshore wind over the next seven years according to a new report by the Offshore Wind Cost Reduction Task Force.

The report indicates that reductions can be achieved by setting out specific actions to drive down costs by more than 30%.

Cuts will see the cost of delivering 18GW of electricity from offshore wind farms drop from £140/MWh to £100/MWH by 2020, saving more than £3 billion each year. This will also help wind become increasingly competitive with other forms of energy production.

Charles Hendry, Energy Minister, said: “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.

“I am encouraged that this report shows that substantial cost savings can be achieved if action is taken and I welcome this valuable work. I look forward to working closely with industry to take this forward further and deliver these ambitious targets.”

28 specific recommendations have been made on how the industry can reduce the cost of generation, covering Supply Chain, Innovation, Contracting strategies, Planning and Consenting, Finance and Grid. Within these the Task Force has highlighted that 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.

Maria McCaffery, Chief Executive, RenewableUK, said: “ As a further boost to this position and to drive the economic opportunities it is creating for UK companies, we have today launched the Offshore Wind Project Timelines document. This will bring greater clarity on the timings of offshore wind developments and enable suppliers to see

in greater detail when and where investments should be made. Through this and the other actions recommended by the Task Force report, the sector will become more cost competitive and will play an increasing important role in meeting the UK’s energy demands, as well as underpinning crucial economic growth.“

In addition the Task Force has identified the development of a more robust domestic supply chain and increased competition as key area for focus.

The Task Force report also calls for industry and Government to work more closely together to address barriers as they arise. A new Programme Board is to be established to do this.

This was posted in Bdaily's Members' News section by Ruth Mitchell .