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Offshore Wind: Delivering More For Less

Offshore Wind: Delivering More For Less

Full Title: Offshore Wind: Delivering More For Less
Author(s): BVG Associates
Publisher(s): BVG Associates
Publication Date: July 1, 2015
Full Text: Download Resource
Description (excerpt):

Successive governments have established the UK as the world leader in offshore wind. Levels of deployment in the last few years have set the industry on a path of steep cost reduction and provided a platform for an industry that will be sustainable without special consumer support.

The analysis set out in this document demonstrates that real, tangible advances in technology, the supply chain, and policy have combined to drive down the cost of energy for projects about to go into construction in 2015. This downward pressure is expected to continue, with offshore wind projects going into construction in 5 years that are competitive with new CCGT plant. The repowering of the oldest projects with the most modern turbines could, from the late 2020s, see the advent of offshore wind plant that is cheaper than CCGT, even under the Government’s lowest gas price forecast.

This is a radical step towards ‘subsidy’ free offshore wind and will enable the UK to continue to decarbonise through the 2020s, cost-effectively.

Being cost competitive with CCGT is only one benefit from this UK success story. Offshore wind has also driven significant inward investment and jobs and growth and has the potential to deliver much greater benefits in the long term and contribute to rebalancing the UK economy. Most of this activity will be focused in the Northern Powerhouse and in coastal areas with traditionally high levels of unemployment.

Growth to a market of 24GW in 2030 will provide a significant opportunity for the UK supply chain. UK companies can be expected to secure more than £36 billion cumulatively between 2015 and 2030 and this will drive a strong, productive UK manufacturing and construction supply chain supporting more than 18,000 directly employed in long term roles. Repowering the UK fleet of projects will at least double the total size and duration of the market, by putting at least two generations of assets on each site, each being operated for 25 years. This will create a strong draw for inward investment, increase the likelihood of high UK content and will sustain and grow the levels of employment for 50 years or more.

A strong UK supply chain will be positioned to seize an export opportunity worth £210 billion up to the end of 2030. UK companies are already providing products, services and knowledge to offshore wind markets in Europe, Asia and the USA, replicating the success of North Sea oil and gas. The anticipated growth in the global market could bring an additional 8,000 jobs by 2030. It will enable UK companies to secure an additional £16 billion in exports between the start of 2015 and the end of 2030.

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of OurEnergyPolicy.org, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.

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