UK “on course” to slash offshore wind costs by 30%

The report, released on Wednesday, by the government-backed Offshore Wind Cost Reduction Task Force, comes as the wind industry received formal backing from the UK Energy Minister.

Drawing on a detailed study from the Crown Estate, the report laid out 28 specific recommendations on how industry can reduce the cost of generation and drive costs down by over 30%.

The recommendations, which cover supply chain, innovation, contracting strategies, planning and consenting, finance and grid, could see the cost of delivering 18GW of electricity from offshore wind drop from £140/MWh today to 100/MWh by 2020.

“In achieving this, offshore wind will take another major step towards being fully competitive with other forms of energy generation which will make up the UK’s energy mix,” the UK government said. In addition, the task force has identified the development of a more robust domestic supply chain and increased competition as key area for focus.

Andrew Jamieson, chair of the Offshore Wind Cost Reduction Task Force, said: “To ensure that the UK’s world-leading offshore wind sector expands rapidly over this decade and fulfils its massive potential within the UK's energy mix, it is vital that costs are reduced.”

Under European law, the UK must meet an ambitious target of 15% of renewables in the primary energy mix by 2020. However, with the UK facing a budget deficit and economic recession, the cost of developing renewables – and the public subsidy needed to support it - has become a contentious issue, with government under increasing pressure from the media and MPs to cut financial support.

Jamieson added: “In doing this not only will we reduce risk and drive investment into the sector, we will further protect consumers from increasing energy costs, reduce the industry’s requirement for financial support and deliver jobs and energy security for decades to come.”

The report prompted the UK energy minister to give formal backing for offshore wind .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.”