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Offshore Wind Journal

Offshore Wind Journal

Next windfarm deal ‘will be cheaper than nuclear’

Tue 14 Feb 2017 by David Foxwell

Next windfarm deal ‘will be cheaper than nuclear’

The head of RenewableUK, Hugh McNeal, made some interesting remarks to The Guardian newspaper recently, noting that offshore windfarms could offer cheaper prices than rates the government has agreed for nuclear power stations.

Mr McNeal said he expected that offshore windfarms would secure a deal with the government lower than the £92.50 per megawatt hour agreed with EDF for £18 billion Hinkley Point C.

“I wouldn’t be surprised if it [offshore wind] cleared Hinkley prices,” he said of the bidding for a £290 million-a-year government subsidy pot in April. The auction is under a scheme known as contracts for difference, which offer generators a guaranteed price for their electricity above the wholesale price. A 35-year deal with EDF was agreed last year.

In the interview with The Guardian, Mr McNeal was upbeat about the future of offshore wind. “I don’t think there’s any doubt about the political commitment of any party, apart from perhaps Ukip, to offshore wind. I think it’s got an incredibly healthy future,” he said.

The industry has been buoyed by recent figures showing the price of offshore wind power had fallen by nearly one-third since 2012. As highlighted by OWJ, a recent report revealed that the cost of energy from offshore wind has fallen by 32 per cent since 2012 and is now below the joint UK government and industry target of £100 per megawatt hour (MWh) four years ahead of schedule.

The target, set in 2012, was expected to be met by 2020, but windfarms given final investment decision in 2015/16 are already achieving prices lower than this target.

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