Positive Energy: how renewable electricity can transform ... - WWF UK

Reducing the costs of
offshore wind
The current cost of offshore wind is around £150-£169/MWh 56 . This
follows unforeseen price increases due mainly to the falling strength
of the pound against the euro and commodity prices. The Offshore
Valuation report says currency fluctuations were the primary reason
for the 26-33% increase in the capital costs of offshore wind during
2008-10. This is mainly due to 80% of the components of offshore
wind turbines installed in the UK between 2005 and 2010 being
imported into the country. The report goes on to highlight that with
the currency impact removed, “underlying capital costs would have
increased by only 4-7% since 2008” 57 .
A 2010 report by the UKERC emphasised that “we should not be
particularly surprised that we have arrived at a point in the history
of a particular emerging technology when costs have increased…
many technologies go through such a period, and still go on to offer
cost effective performance in the long run” 58 .
Reducing the cost of offshore wind to £100/MWh by the early
2020s has become a key objective for the DECC, with a taskforce
now in place to achieve this goal. Costs of offshore wind may
fall further beyond the early 2020s with future levelised cost
projections of £70-80/MWh by 2020-2030 forecast in the Offshore
Valuation report 59 .
WWF-UK 2011 Positive Energy page 50