Offshore Wind Projects Total 50 Percent Drop in Subsidy Costs - CSR Minute
The rap on renewable energy from its critics has been the high cost. A new technology such as offshore wind power has required an enormous initial investment in R&D, new turbines, and new methods of electricity storage and distribution. It has also needed equally large subsidies from governments to encourage that investment. But the economic argument has turned a corner after this week’s auction by the UK government for contracts to provide electricity from offshore wind farms. The contracts showed sharp falls in subsidy costs of more than 50 percent, according to the Financial Times.
There are two main reasons for this large decrease. One, construction costs have dropped as the offshore wind industry has matured. And two, larger turbines that produce more power per unit are being installed by companies such as Dong Energy of Denmark. These future offshore wind farms will produce electricity at about half the cost of power from the Hinkley Point C nuclear power plant, now under construction in the UK. That’s a cost-effective bottom line that will give a major boost to the renewable energy sector.
I’m John Howell for 3BL Media.