Could offshore wind soon prove cheaper than its onshore cousin?

(Business Green, 28 Jan 2019) New report from Cornwall Insight suggests plummeting offshore wind costs and strict onshore planning rules could see the cheapest form of new power move offshore.

Onshore wind is currently thought to be the cheapest form of new generating capacity available in the UK, but could its crown soon be challenged by its offshore cousin?

That is the question posed by a new analysis by influential energy research specialist Cornwall Insight, which suggests offshore wind is likely to surpass onshore wind power to become the new cheapest source of new energy in less than 10 years.

The assumption has long been that the costs associated with installing and maintaining turbines at sea will continue to more than offset the higher yields enjoyed as a result of stronger and more reliable winds, meaning onshore wind farms would continue to offer the more cost effective option.

However, Cornwall Insight's new projections suggest the emergence of a new generation of giant offshore wind turbines coupled with on-going planning restrictions for onshore turbines could see offshore projects undercut their onshore equivalent on a levelised cost of energy (LCOE) basis by around 2028.

The company said the projections are based on projected capital costs by technology, fixed and variable operational costs, expected hurdle rates, and locational factors such as transmission losses and connection fees. They also use the current load factors for both technologies, which stand at 58.4 per cent for offshore wind and 38 per cent for onshore wind.

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Business Green, 28 Jan 2019: Could offshore wind soon prove cheaper than its onshore cousin?