On September 11 this year, it was announced widely, across the BBC, Telegraph and Guardian, that the tariffs required for new offshore wind farms had halved since the 2015 auction for clean energy projects.
The implications of this dramatic cost reduction could be hugely beneficial for the UK energy sector – if the players play their cards right.
Here’s one potentially gargantuan implication: as a result of the cost decline, it’s now possible to develop new offshore wind farms for a guaranteed price of £57.50 per megawatt hour. This compares with the Government’s commitment to pay £92.50 per megawatt hour to the planned Hinkley Point.
The required renewable capacity to match the planned generation of Hinkley Point C could be delivered in less than two years, in a fraction of the time and at a fraction of the cost.
Matthew Clayton, managing director of Thrive Renewables, a Good With Money Good Egg company that allows people to invest directly in UK renewable projects, said: “The results of the offshore auction price is a great success for the sector and a milestone for the transition to a cleaner energy system. The UK is playing to its physical strength, we are exposed to a powerful wind regime and as an island, we have a long coastline.
The Government can on one hand be pleased with the cost reduction, but on the other hand, this does make the cost of Hinkley Point C nuclear plant now seem way out of the market.”
The renewables revolution
The UK’s renewable energy capacity has been steadily gaining pace, BEIS Energy Trends report for Sept 2017 shows renewable electricity generation capacity grew to 37 gigwatts in 2017, having installed 4.4 gigawatts of new renewable generation over the course of 2017. Renewables are now generating more than a quarter of the UK’s electricity.
Matthew says: “At current levels of deployment, the required renewable capacity to match the planned generation of Hinkley Point C could be delivered in less than two years, in a fraction of the time and at a fraction of the cost.”
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