Some reports say that offshore wind is crazy expensive. In fact, an economist from Oxford University, Dieter Helm, was quoted in the Economist back in 2014 as saying that offshore wind is “among the most expensive ways of marginally reducing carbon emissions known to man”.
That is probably old news, though, just like the Dutch backtracking on their proposed subsidy for offshore wind back in 2011.
But then, offshore wind has seen an uptick, nay a booming market as the US, China and the UK are developing more and more offshore wind farms, as we earlier reported here at The Green Optimistic.
With several technological developments pushing down development costs, and regulators seeing the light, the winds are changing as far as offshore wind development is going.
One energy analyst, Mike Parr, has gone as far as saying that offshore wind power is cheaper than combined cycle gas turbines and nuclear power. He goes on to say that offshore wind power developers are making a killing off government subsidies.
Well, I don’t know if the subsidy is too high. To put things into perspective, maintaining offshore wind turbines isn’t easy, actually it’s quite dangerous. Just imagine having to sail up to a ginormous wind turbine in choppy waters amidst strong gales, and then having to climb the tower to maintain the wind turbine. At least people on oil platforms pretty much just have to stay put days on end, and yet their job is considered high risk. So what does that make of offshore wind power maintenance personnel jobs then?
Even if costs of producing power are notoriously tricky to pin down, the analysis is sound in that it draws from actual bids. He noted that the tenders for Danish offshore wind power cost has been dropping from €140/MWh (Anholt) to €103/MWh (Horns Rev 3), a 26% decrease in five years!
This makes Horns Rev 3’s subsidy cheaper than that of Hinkley Point’s new nuclear reactor that will get £92.50/MWh (approx €125/MWh). It is still higher, though, than what CCGT’s get. But things are getting better for offshore wind which is why the purchase price for the Saeby offshore wind power development is expected to drop further down to €90/MWh.
In any case, this just means that developers and consumers of offshore wind power are pretty sure that they’ve made a sound decision and can just cut back and hang ten.