Cost Predictions: Cost predictions and cost outcomes
The Global Warming Policy Foundation|Andrew Montford|Feb 3, 2021
This informative paper discusses the high cost of offshore wind. A summary of the paper is provided below. The full paper can be accessed at the document links on this page.
This informative paper discusses the high cost of offshore wind. A summary of the paper is provided below. The full paper can be accessed at the document links on this page.
Summary
Wind-energy advocates – including official bodies – claim that there has been a dramatic fall in the cost of offshore wind power. This paper compares the figures they have presented to support these assertions with three separate comprehensive reviews of the UK offshore fleet, based on audited accounts and actual operating data. It also compares advocates’ capital cost predictions for the next generation of windfarms to statements issued by windfarm developers.
Advocates claim that costs for windfarms have been falling quickly for several years, although there is general agreement that the cost is, on average, still several times the cost of power from gas-fired power stations.
However, they suggest that windfarms commissioned in 2019 and 2020 will have dramatically lower costs, and those in future years will be lower still.
The capital cost elements of all these predictions mostly contradict the figures put forward by windfarm developers themselves.
The financial accounts of Beatrice, the only offshore windfarm that was commissioned in 2019, already show that the advocates‘ estimates cannot be achieved in practice.
The Dogger Bank windfarms, to be built in shallow waters, may have somewhat lower costs. However, for most forthcoming offshore windfarms, costs are likely to remain at around £125–150/MWh, approximately four times the cost of power from a gas-fired power station.
