Cost of offshore wind 'could be driven down by innovation'
14 June 2012
Posted by Michelle Devonshire
The cost of generating offshore wind power could be significantly reduced through the use of cutting-edge technology and innovation.
This is the claim made in a new report about the form of generation, which suggests the UK will fail to meet its targets in this area unless action is taken to push down costs.
According to the publication from the Offshore Wind Cost Reduction Task Force Report, innovation is key to slashing prices over the next seven years and costs could be reduced by more than 30 per cent to £100 per megawatt hour (MWh) by 2020.
This is a potential saving of £3 billion a year and the report includes 28 specific recommendations, which cover supply chains, contracting strategies, planning, finance, the National Grid and innovation, among others.
Actions for both the Government and the renewables industry are outlined in the study, which reveals research by The Crown Estate has reached the same conclusion, with the current cost of energy from offshore wind at £140/MWh.
Increasing competition, making domestic supply chains more robust, more efficient contracting and "alliancing", a strategy used by the oil and gas sector, are all identified as crucial drivers in reducing costs.
Executives from renewable technology firms have voiced their commitment to driving down costs over the coming years and implementing the recommendations made in the task force publication.
Commenting on the report, Charles Hendry, the UK Energy Minister, stated: "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."
In a speech to the RenewableUK Global Offshore Wind Conference, he pointed to "how far this industry has come in the UK in such a short space of time", thanking the task force for its work as part of efforts to "unlock the vast potential of offshore wind in the following decade and beyond".
Mr Hendry added working together will be important to cut costs and address barriers to development as the sector continues to mature.