Offshore wind setting the price point for large scale low carbon generation
Those of us who work in the Renewable Energy sector often find ourselves on the back foot when defending subsidies for low carbon energy generation. We all remember the allegation that, in 2013, David Cameron ordered aides to ‘get rid of all the green crap’ from energy bills in a drive to bring down costs.
On Global Wind Day it is therefore great to be able to report that, when discussing plans for the Bradwell B nuclear plant, Robert Davies, Chief Operating Officer of CGN UK, recently told Reuters: “We know we have to get within a realistic range of (the cost of) offshore wind”.
In stating that Bradwell B will seek a much lower minimum guaranteed price than Hinkley Point, Davies has demonstrated that offshore wind is now setting the price point for new large scale low carbon generation.
This startling revelation comes on the back of what GWEC has labelled a ‘spectacular year for the offshore wind sector’. More than 4GW offshore wind power was connected to the grid in 2017 across nine markets. The UK is at the centre of this global activity with just over 35% (6.8GW) of the 18.8GW installed worldwide as well as playing host to the first floating offshore wind farm, Hywind Scotland.
The future for offshore wind is also very bright with market consultancy, MAKE projecting a cumulative annual growth rate of 16% for the decade up to 2026. While much of this new capacity will be added in Europe it is likely that by the mid-2020s the focus will have shifted east with Taiwan, South Korea, Japan and China combined expected to install the majority of new capacity from 2025 onwards. All this new development is being planned in an era of competitive auctions which are accelerating the transition to zero subsidy merchant markets.
And this is just the beginning of the transition to a low carbon future with DNV GL’s Energy Transition Outlook forecasting that in 2050 electricity generation will be dominated by renewables with wind and solar PV each having a 36% share.
Every year Global Wind Day provides us with an opportunity to take stock and look back on what we have achieved. In 2018 we can also look forward with confidence knowing that we work in a sector that is increasingly setting the agenda for the sustainable, low carbon future that we are all striving to achieve.