U.S. Markets closed

Offshore wind energy price plunges 30 per cent to a new record low

Ben Chapman
Reuters

A new wave offshore wind farms around the UK will generate power more cheaply than burning coal and, for the first time will not require any subsidy, in a milestone for green power generation.

The cost of power from offshore wind has plummeted 30 per cent in two years with a raft of 12 new energy projects coming in at a record low price of between £39.65 and £41.61 per megawatt hour, the government revealed on Friday.

That’s less than half the £92.50 that the government has committed to pay for the power from the delayed and over-budget Hinkley Point C nuclear plant due to open in 2025.

The new projects will power around seven million homes with clean electricity. The rapid drop in the cost of offshore wind, which a few years ago was more expensive than nuclear reactors, demonstrates how quickly the economics of energy generation have been upended.

Simon Virley, UK head of energy and natural resources at KPMG, said the latest price of renewable generation, which was decided by an auction process, was “truly extraordinary”.

“The government has secured almost 6GW of new renewables capacity, without spending any of the £65m budget allocated for this auction, due the record low clearing prices.

“Giant offshore wind projects will now be built in the North Sea effectively ‘subsidy free’.

“This raises the prospect of offshore wind contributing even more than previously envisaged to achieving the UK’s Net Zero emissions target by 2050.”

Boris Johnson said: “The UK is leading the way in the fight against climate change, and it's great news that millions more homes will be powered by clean energy at record low prices.

The news came on a day of climate change strikes involving millions of people in 150 countries.

  • Read more

Protests inspired by the teenage Swedish activist Greta Thunberg are demanding world leaders take immediate action to limit the harmful effects of manmade climate change ahead of an environmental summit at the United Nations.

Big corporations also sought to highlight their own efforts to tackle climate change.

Google boss Sundar Pichai said the tech giant plans to make the “the biggest corporate purchase of renewable energy in history“.

Included in the investment will be more than $2bn (£1.6bn) in energy infrastructure and 1,600-megawatts of wind and solar agreements.

“In all, our renewable energy fleet now stands at 52 projects, driving more than $7bn in new construction and thousands of related jobs,” Pichai said.

Ahead of the climate change protests, Jeff Bezos pledged to make Amazon carbon neutral by 2040 - 10 years earlier than the Paris Agreement requires.

Read more

Read more Offshore wind energy is cheaper than new nuclear power for first time