Offshore wind industry to slash costs by over 30% in next seven years
13 June 2012
A new report from the industry-led Offshore Wind Cost Reduction Task Force (CRTF) shows that the UK is on course to reduce the cost of electricity from offshore wind substantially over the next seven years. The report builds on detailed evidence in a study published simultaneously by The Crown Estate, to show how reductions can be achieved, setting out specific actions to drive costs down by over 30%.
This significant cut will see the cost of delivering 18GW of electricity from offshore wind farms (around 20% of the UK’s total electricity demand) drop from £140/MWh today to £100/MWh by 2020, saving over £3bn per year. 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 Offshore Wind Cost Reduction Task Force report lays out 28 specific recommendations on how the industry can reduce the cost of generation, covering Supply Chain, Innovation, Contracting strategies, Planning and Consenting, Finance and Grid. Within these the Task Force has highlighted that more efficient contracting and the concept of “alliancing”, used successfully by the North Sea oil and gas industry to reduce risk and bring down costs, have the potential to be transformative in lowering cost and improving working practices.
In addition the Task Force has identified the development of a more robust domestic supply chain and increased competition as key area for focus, and calls for industry and government to work more closely together to address barriers as they arise. A new Programme Board is to be established to do this.
The CRTF report is available from the RenewableUK website.
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