Offshore wind costs could fall to a point where it is cost competitive with new build gas plants in the UK provided they face the full cost of their carbon emissions, the Committee on Climate Change (CCC) said in its 2015 Progress Report to Parliament.
Ongoing innovation in offshore wind relies upon a visible future market of sufficient size across Europe, within which the UK is the largest player. That visibility can be provided by an extension of the existing policy framework and further clarity about the incentives for low-carbon investment in the 2020s.
CCC has recommended that the UK government extends funding under the Levy Control Framework to at least 2025 and continues to offer low-carbon contracts via auction. Within this, offshore wind should be supported until it is cost competitive with a new build unabated gas plant by setting out an intention to contract 1-2 GW per year, provided costs fall, and with a view to removing subsidy in the 2020s.
The Secretary of State for Energy and Climate Change, Amber Rudd, recently announced the government’s intention to continue supporting offshore wind into the 2020s, providing costs continue to fall. If that approach proves successful then offshore wind could play a key part in the UK’s low-carbon future, CCC believes.
In its 2011 Renewable Energy Review, CCC suggested that upwards of 400 TWh of electricity per year, more than the total of current UK electricity consumption, could be generated in UK waters, particularly if floating offshore turbines are developed.