MAJOR efforts are underway to reduce costs in the offshore wind sector with the UK Government saying it aims to see a 50% cut in subsidy levels from 2020 onwards.
DONG Energy is the largest player in the European offshore wind sector and Benj Sykes, its operations director for renewables in the UK, believes it can almost halve costs.
He said: “The industry is under increasing pressure from the Government to show it can bring costs down which may explain why a number of schemes have fallen by the wayside in recent months.
“Building a supply chain will help bring costs down. We believe we are capable of bring costs down by 30 to 40% to £100 per MW/h. In fact DONG wants to go further and is looking at 100 Euros per MW/h (or £80 per MW/h).”
Offshore wind subsidies are currently £155 per MW/h, which is three times the wholesale price of electricity, with the costs being passed on through household and business electricity bills.
Sykes added: “We are currently trialling 8MW turbines and these will drive down the costs. The industry needs to earn the right to exist on a large scale.
“There are still uncertainties, but we are pretty confident. If we show as an industry we can get our costs down then the opportunity is there for the taking, but we have to earn the right to grow as an industry.
“We can create a big industry here in the UK for foundation and turbine manufacturers and the supply chain.”
For more on offshore wind and the energy sector see: http://www.thejournal.co.uk/authors/Peter_McCusker/