Meeting the government’s commitment to 40GW offshore wind target this decade would likely cost £48 billion, double the past decade’s outlay but delivering three times as much new capacity, according to Aurora Energy Research.
The firm urged government to quickly push forward if it is serious about meeting the target as playing catch-up later in the decade will pose problematic for both the UK supply chain and investors.
According to Aurora’s report, installations after 2025 must accelerate to around 260 new turbines commissioned a year, or one every working day. That assumes structures each of 10-12MW in size, triple the North Sea’s earliest builds. No planning consents exist after 2025, and few contracts have been let, Aurora says.
Probable impacts on power markets of offshore wind at this scale, say the analysts, could include:
- Higher prices for future and existing contract for difference projects, resulting from reduced capture prices for renewables
- Higher prices in capacity markets, pushing up total system costs. Prices must stay higher, as installations strive to recoup revenues lost from lower wholesale prices
- Lower baseload prices, likely to reduce the total cost of the wholesale price to consumers
See the report here.