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UK’s offshore wind farms set to be much cheaper than nuclear power projects

UK offshore wind power subsidy set to undercut nuclear, , Campaigners for renewable energy say this is a key moment for the industry by: Nathalie Thomas and Andrew Ward , Sept 8 17 The results of an energy subsidy auction held by the government will prove offshore wind farms are a much cheaper way to meet the UK’s future electricity needs than contentious nuclear projects such as Hinkley Point, supporters of renewable technology have claimed.

The latest auction results, to be published on Monday, are expected to show a dramatic fall of as much as nearly 50 per cent in the minimum electricity price that is guaranteed by the government to offshore wind farm developers compared with the last similar subsidy round in 2015. They are also expected to show a substantial discount on the £92.50 per megawatt hour “strike price” guaranteed by the government to the French and Chinese companies behind the Hinkley Point nuclear plant in Somerset during its first 35 years of operation. The Hinkley price, which was set in 2012, rises with inflation and is now worth closer to £100/MWh. The latest subsidy auction was aimed by the government at “less established technologies” including offshore wind and energy derived from tidal currents.

Successful offshore wind projects are expected to be guaranteed electricity prices in a range of £60 to £75/MWh for 15 years linked to inflation, according to Cornwall Insight, a consultancy. This compares with the average £117.14/MWh awarded to offshore projects in the last auction in 2015. Offshore wind farm developers are seeking much lower subsidies after their costs tumbled, reflecting how the industry has matured and learnt how to construct projects more cheaply.
“This expected reduction in the price of power from offshore wind will mark a huge moment for the UK energy sector,” said Hannah Martin, head of energy at Greenpeace UK. Jonathan Cole, managing director for offshore wind at ScottishPower Renewables, said: “These ongoing cost reductions show that offshore wind is in pole position to be the foremost low carbon power source.” The low auction prices for offshore wind will be seized on by critics of nuclear power, who argue it is too expensive to compete in a world of cheap renewable energy…….

September 9, 2017 - Posted by | renewable, UK

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