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Offshore wind energy is already cheaper than gas or nuclear

wind-turbine-oceanThe myth of expensive offshore wind: it’s already cheaper than gas-fired and nuclear [informational graphs] REneweconomy By  on 2 April 2015 Analysing public data on offshore wind in Denmark, energy consultant Mike Parr concludes that existing offshore wind is already cheaper than gas-fired power plants. Future offshore wind farms will be cheaper still – and up to 60% less expensive than the proposed nuclear power plant at Hinkley Point C in the UK. This means, writes Parr, that government support for offshore wind can be quickly and substantially reduced. ……..

Financial (R)Evolutions?When we analyse the available data, we can draw some interesting conclusions about the evolution of costs in offshore wind. Offshore wind turbines already appear to be cheaper than combined-cycle gas turbines (CCGT’s), although this is not yet reflected in the subsidies that the operators get……

Cheaper than gas-fired power and nuclear

What is interesting to note, in addition to the high profitability of Anholt in particular, is that the Danish auctioning process seems to be successful at driving prices down (26% reduction over 5 years Anholt vs Horns Rev 3).

Even more importantly perhaps are the actual costs of offshore wind, which are lower than the bid prices. …….

If we compare the offshore wind farms to the cost of the nuclear power project proposed at Hinkley Point, which will get £92.50 (about €125) per MWh for 35 years, Anholt delivers electricity that is 40% cheaper, Horns Rev3 will deliver electricity that is 58% cheaper and Saeby 60% cheaper. Of course the authorities should ensure that they will get competitive bids.

The only uncertainty in this is how wholesale prices in Denmark will evolve in the next 25 – 30 years. What is certain is that once 10 years have elapsed, the owners of Danish wind farms will be at the mercy of the markets and the wind. By contrast, owners of UK nuclear plants seem to have been granted certainty on both price and market access. Whilst the UK talks about energy markets, the socialist Danes seem to have implemented them. Funny that. http://reneweconomy.com.au/2015/the-myth-of-expensive-offshore-wind-its-already-cheaper-than-gas-fired-and-nuclear-99353

April 4, 2015 - Posted by | Denmark, renewable

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