The industry association WindEurope has said offshore wind energy is no longer expensive, and that the fall in development prices has left European politicians behind the curve.
The offshore wind industry has witnessed an unprecedented price breakthrough in the past ten months. In July 2016 Dong Energy surprised the industry with its record-low bid of EUR72.7/MWh (USD79.35) in the Dutch tender for the Borssele I and II wind farms. In November 2016 Vattenfall posted a winning bid of EUR49.9/MWh (USD54.46) for the Danish Kriegers Flak project; while in December 2016 a Shell-led consortium won the Borssele III and IV tender in the Netherlands with a EUR54.5/MWh (USD59.48) strike price. This month EnBW and Dong Energy announced the world’s first subsidy-free offshore wind farms in Germany, which will be developed by 2025.
“Price levels are dropping quicker than anyone thought. These deals have completely changed the picture for offshore wind. Now they should also change the perception of policy makers. Offshore wind is no longer an expensive niche technology. It is a strategic industrial sector for Europe that can deliver competitive energy for its citizens and businesses,” said WindEurope ceo Giles Dickson.
He said that energy policy proposals tabled by Brussels, along with the strategies being pursued at national levels, do not reflect the new price environment. “One problem is that the impact assessment that served as a basis for the EU’s Clean Energy Package uses outdated price figures. And that is impacting the level of policy ambition for offshore wind and renewables build-out after 2020. In short, too many policy-makers and opinion-formers think offshore wind is much more expensive than it really is – and many think it’s going to remain that way. Not enough people appreciate that it is already competitive. That needs to be corrected.”
Dickson highlighted that collaboration within the industry, supportive government schemes and economies of scale have been instrumental in helping to reduce the costs of offshore wind. “The expectation that offshore turbines will grow to 13 to 15 MW in the next decade (from 6-8 MW today) will have a significant effect on cost trajectories,” he added.
Dickson said the industry should focus on getting stable and visible commitments from government in order to continue the cost-cutting drive. “The industry needs at least 4 GW per year after 2020 to continue reducing costs. If countries want to capitalise on the development of a competitive, clean and job creating sector, they need to set robust volume targets in their national energy and climate plans.”
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