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Researchers at the Imperial College of London say the latest offshore wind farms may produce electricity for less than the average wholesale cost, lowering utility bills for UK customers.

Clean Power

UK Offshore Wind May Soon Be Subsidy-Free

Researchers at the Imperial College of London say the latest offshore wind farms may produce electricity for less than the average wholesale cost, lowering utility bills for UK customers.

Researchers at Imperial College in London conducted an exhaustive review of all European offshore wind installations since 2006 and concluded that offshore wind may soon be so cheap that newer installations will generate electricity at below wholesale prices, meaning government subsidies will no longer be required. In fact, by mid-century, those wind farms may actually be paying dividends that lower the cost of electricity for everyone. Even better, the industry will create tens of thousands of new jobs.

The study was published recently in the journal Nature Energy. Here is the abstract that summarized the research.

Offshore wind energy development has been driven by government support schemes; however, recent cost reductions raise the prospect of offshore wind power becoming cheaper than conventional power generation. Many countries use auctions to provide financial support; however, differences in auction design make their results difficult to compare. Here, we harmonize the auction results from five countries based on their design features, showing that offshore wind power generation can be considered commercially competitive in mature markets.

Between 2015 and 2019, the price paid for power from offshore wind farms across northern Europe fell by 11.9 ± 1.6% per year. The bids received in 2019 translate to an average price of €51 ± 3 MWh−1, and substantially different auction designs have received comparably low bids. The level of subsidy implied by the auction results depends on future power prices; however, projects in Germany and the Netherlands are already subsidy-free, and it appears likely that in 2019 the United Kingdom will have auctioned the world’s first negative-subsidy offshore wind farm.

Dr Malte Jansen, lead author of the study, says “Offshore wind power will soon be so cheap to produce that it will undercut fossil fueled power stations and may be the cheapest form of energy for the UK. Energy subsidies used to push up energy bills but within a few years cheap renewable energy will see them brought down for the first time. This is an astonishing development.”

What will make the next generation of offshore wind so inexpensive? The massive size of the turbines, many of which will have a blade diameter of 220 meters (that’s 722 feet for our US readers. To put that in context, the wingspan of a 747 is a mere 224 feet.) Larger turbines can harness more wind energy and have access to more consistent wind speeds at higher altitudes, making their production of electricity more predictable and reliable.

According to The Independent, the newest wind farm at Dogger Bank in the North Sea has the same installed capacity as the Hinkley Point C nuclear power plant and is expected to produce about two-thirds of its annual electricity. It will also cost massively less money than the ill-considered Hinkley Point nuke.

Dr Iain Staffell of the Center for Environmental Policy at Imperial College says,

“The price of offshore wind power has plummeted in only a matter of a decade, surprising many in the field. The UK auctions in September 2019 gave prices that were around one-third lower than those of the last round in 2017, and two-thirds lower than we saw in 2015.

“This amazing progress has been made possible by new technology, economies of scale and efficient supply chains around the North Sea, but also by a decade of concerted policy making designed to reduce the risk for investing in offshore wind, which has made financing these huge billion-pound projects much cheaper.

“These new wind farms set the stage for the rapid expansion needed to meet the government’s target of producing 30 per cent of the UK’s energy needs from offshore wind by 2030. Offshore wind will be pivotal in helping the UK, and more broadly the world, to reach net-zero carbon emissions, with the added bonus of reducing consumers’ energy bills.”

Nothing succeeds like success, and the researchers say the next offshore wind farms could have an important subsidiary effect on carbon emissions in the UK. They suggest more ambitious projects may now be attempted at offshore wind farms such as producing hydrogen fuels using the wind power on site. Those hydrogen fuels could replace gasoline used in transportation and natural gas used for heating homes.

The researchers conclude their study by saying,

“Policymakers can take the rapid price decreases shown here as evidence that offshore wind will deliver in the future as a low-cost and low-carbon technology. Hence, the initial spending made on support schemes has been successful in helping to create a new industry. Building on the story of success, policymakers may want to extend their attention to support less mature technologies such as floating offshore wind, which would allow access to deeper waters with higher wind speeds. These technologies are currently at a less mature stage, but may prove vital in harnessing the world’s best wind resources.”

A spokesperson for the UK Department of Business, Energy and Industrial Strategy told The Independent, “The offshore wind sector is a major British success story, with the UK now home to the world’s largest wind farms powering millions of homes each year. Today’s report shows there are further benefits coming down the track, with offshore wind playing a key part of our drive to provide cleaner, greener electricity and create hundreds of thousands of green collar jobs in the supply chain.”

Perhaps offshore wind will finally drive a stake through the whole idea of getting electricity from thermal generation, and not a moment too soon.

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