Offshore Wind Prices: Will Essential Learnings Aid US Assignments?
Wind vitality observers throughout the world took notice when Bloomberg Information reported the agreement price (September 11) for a U.K. power auction: £57.fifty ($seventy seven.76) for every MWh — a 50 per cent drop in latest offshore power charges. In distinction, Bloomberg observed the U.K. will pay £92.50 ($a hundred twenty five.09) for each MWh for electric power from the Hinkley Position atomic plant.
The Danish utility DONG Power A/S was a single of the reduced-bid companies in that modern auction which, for DONG, secured energy from its “Hornsea Task Two (HP2),” 89 km (55 miles) off the Yorkshire coastline, in the North Sea. HP1 is underneath construction, and HP3 is getting produced.
At one,386 MW, HP2 will grow to be the world’s greatest wind farm when operational, most likely in 2022.
A 50 p.c fall in the price of any commodity draws in interest, and concerns. Does the Hornsea project represent a sort of tipping-point, an indicator that offshore wind assignments elsewhere will in the same way gain from slipping prices?
In an announcement, DONG lists the favorable “cost-drivers” for HP2.
- Scale: project dimensions gives benefits
- Experience decreases hazards
- Synergies: controlling two assignments from one particular web site
- A experienced sector — DONG knows what it’s undertaking
Project dimension is a crucial expense driver.
“The excellent measurement of an offshore wind farm is 800-1,five hundred MW,” DONG wrote in its Hornsea Venture announcement. In distinction, in the U.S., theonlyoff-shore wind farm in Rhode Island is thirty MW. Lengthy Island’s prepared South Fork Wind Farm is meant to be ninety MW.
Of 28 U.S. offshore wind assignments in improvement, none is in development. Firms operating in the U.S. offshore wind sector can’t nevertheless match the real-entire world knowledge of the European industry. DONG can construct in the North Sea and preserve income since DONG has learned how to develop in the North Sea. In the U.S., companies even now want to development on that learning curve.
Kate Freeman, PhD, is a modelling and investigation expert with BVG Associates, a renewable energy business concentrating on wind, wave and tidal strength methods, with places of work in the U.K. and the U.S.
Freeman thinks that modern favorable offshore wind tendencies will reward the U.S. for illustration, efficiencies in standardization and installation. She noted the modest scale of U.S. assignments, however, saying that “the U.S. is significantly less probably to reward as considerably.” Nonetheless, she said that “U.S. venture costs are trending in direction of Europe’s low costs” and that Europe’s expertise will benefit U.S. projects.