Offshore Wind Energy Just Reached An Incredible Milestone In The UK

Emma Thompson welcomes the news that the price of offshore wind has fallen. Renewable UK forecasts that prices will be significantly lower than the £92.50/MWh awarded to the Hinkley Point nuclear plant

Subsidies have fallen 50% since the last auction in 2015, and are down even further on the £150/MWh given to the first wind farms awarded contracts for subsidies.

Eleven new energy projects of all types worth up to £176M (US$232M) a year were successful in the latest competitive auction for renewable technologies in the United Kingdom, of which three were for offshore wind: Dong Energy secured support for the near-1.4 gigawatt (GW) Hornsea 2 project and EDPR and Engie for the 950 megawatt (MW) Moray 1 projects.

That's significantly lower than the £92.50 contracts awarded to France's EDF in 2012 to build Hinkley Point C, which will be Britain's first new nuclear plant in over two decades.

Tom Greatrex of the Nuclear Industry Association said: "It doesn't matter how low the price of offshore wind is".

In total, the 11 projects will generate over 3 gigawatts (GW) of electricity, enough to power 3.6 million homes.

Actor Emma Thompson recently visited Thanet, Kenta, a United Kingdom wind farm, welcoming the news that offshore wind has hit the record-low price.

Energy analysts said United Kingdom government policy helped to lower the costs by nurturing the fledgling industry, then incentivising it to expand - and then demanding firms should bid in auction for their subsidies.

"We're looking 30 years into the future for offshore wind to see what it could potentially yield", he says.

There are also costs of dealing with excess electricity when there is too much wind or sun, with large scale energy storage the next technological requirement.

Representing the offshore wind industry, RenewableUK's Chief Executive Hugh McNeal, said: "The phenomenal growth of the UK's world-leading offshore wind industry is an industrial success story made possible by tens of thousands of tenacious innovators and game-changers all around this country working in renewable energy". The UK supply chain, he added, "is going from strength to strength".

Danish utility group Dong Energy came in with an offer of £57.50 per megawatt-hour at its Hornsea 2 offshore wind farm, with EDP Renovaveis and Engie set to receive the same amount for their Moray Firth East project. Tidal energy projects are already showing cost reductions and with the right encouragement can undergo the same sort of journey as offshore wind.

The three projects, along with eight other renewable energy projects, put in the lowest bids for Contracts for Difference (CfDs).

The figures, from the Department for Business, Energy and Industrial Strategy, for offshore wind were revealed in process of an auction for subsidies, in which the lowest bidder wins.

Expectations among the offshore wind industry were high ahead of today's announcement that the sector would deliver a serious improvement in costs.

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