Cut-throat competition is slashing offshore wind costs to unthinkable levels

Cut-throat competition is slashing offshore wind costs to unthinkable levels, by Ambrose Pritchard-Evans.

For years the complaint against offshore wind was prohibitive cost.  The new worry is that it is suddenly becoming too beguilingly cheap.

The world’s biggest wind companies are driving down power contracts so fast in their coat-throat battle for market share that they may be making impossible commitments. …

This year’s contracts are a spectacular vindication of offshore wind technology. Aerodynamic smart blades and sensors are now de rigueur. The latest 700ft turbines can generate 8 megawatts each, slashing number of foundations and cables needed. Load factors have risen from 30pc a decade ago to 50pc on the newest arrays. Sheer industrial scale has done the rest. …

Today’s benign circumstances has artificially depressed costs. The slump in North Sea oil and gas exploration means that wind operators can lease ships and offshore crews at bargain rates. The global hunt for yield in a world of zero rates has compressed financing rates. Steel has been cheap. None of this may last.

Lillgrund Wind Farm's wind turbines in the Sound near Copenhagen and Malmö

UK Offshore wind electricity map in real time here.

The UK generates more electricity from offshore wind than any other country in the world. The sector is meeting around 5% of annual UK electricity requirements and this is expected to grow to 10% by 2020.

hat-tip Stephen Neil