Offshore wind industry aims to be cost competitive by 2020
Offshore wind power will be a "vital part" of the UK's low-carbon energy mix in the future and has the potential to compete with other energy sources - if costs come down, according to energy minister Charles Hendry.
Speaking at the launch of a major new report into offshore wind and cost reduction by DECC today (June 13), Mr Hendry said that the offshore industry will help the UK develop "diverse and secure" low carbon energy.
The report by the Offshore Wind Cost Reduction Task Force claimed that the UK is on track to reduce the cost of electricity from offshore wind "substantially" over the next seven years and is on track to be cost-competitive.
Mr Hendry said: "I am encouraged that this report shows that substantial cost savings can be achieved if action is taken and I welcome this valuable work. I look forward to working closely with industry to take this forward further and deliver these ambitious targets."
Building on the findings of a new study by commercial property business The Crown Estate, also published today, the report sets out 28 key actions for industry and government to take to cut the cost of generating electricity in the sector by more than 30% by 2020.
These include plans to reduce the cost of generation, improve supply chain, innovation, contracting strategies, planning and consenting, finance and grid buy-in.
As a result, the report said that the cut will see the cost of delivering 18GW of electricity from offshore wind farms will fall from £140MWh to £100MWh by 2020 - helping offshore wind take a "major step" towards being fully competitive with other forms of energy generation.
It has also identified increased competition and the development of a more robust domestic supply chain as a key area for focus and calls for industry and government to work more closely together to address barriers to growth.
Offshore Wind Cost Reduction Task Force chair Andrew Jamieson, said: "To ensure that the UK's world-leading offshore wind sector expands rapidly over this decade and fulfils its massive potential within the UK's energy mix, it is vital that costs are reduced.
"In doing this not only will we reduce risk and drive investment into the sector, we will further protect consumers from increasing energy costs, reduce the industry's requirement for financial support and deliver jobs and energy security for decades to come."