September 11, 2017 Read More →

U.K. Offshore Wind Energy Is Cheaper Now Than Nuclear

Financial Times:

The economic case for renewable energy in the UK was given a strong boost on Monday as an auction to provide electricity from offshore wind farms showed sharp falls in subsidy costs.

The cost of subsidies to the UK’s offshore wind farms in contracts awarded in the auctions dropped by more than 50 per cent and is now well below the price the government has guaranteed for energy from the planned Hinkley Point nuclear power plant.

Three offshore wind projects have won contracts from the government in the latest auction for “less established technologies”, which was also open to schemes such as tidal but excluded solar and onshore wind. 

The price of electricity guaranteed to offshore wind developers has dropped to as low as £57.50 per megawatt hour — below even the most optimistic forecasts from analysts and a significant fall from the average £117.14/MWh awarded to offshore schemes in the last comparable subsidy auction in 2015. 

Analysts had expected developers to bid for subsidies in a range of £60-£75/MWh, reflecting a fall in construction costs as the offshore wind industry has matured.

Developers such as Dong Energy of Denmark, which is behind one of the three successful schemes, are also installing larger, more powerful turbines. 

The results of the latest “contract for difference” auction published on Monday were welcomed by supporters of renewable energy, who argue offshore wind and similar technologies can become the foundation of the UK’s energy policy, as the government strives to meet carbon reduction targets. 

Hugh McNeal, chief executive of RenewableUK, a trade body, said: “We knew today’s results would be impressive, but these are astounding.”

More: Renewable energy case boosted by sharp subsidy fall

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