Offshore wind power cheaper than new nuclear

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Dynamism from offshore wind in the UK will be cheaper than electricity from new atomic power for the first time.

The cost of subsidies for new offshore wind be kills has halved since the last 2015 auction for clean energy projects

Two firms mean they were willing to build offshore wind farms for a guranteed consequence of £57.50 per megawatt hour for 2022-23.

This compares with the new Hinkley Score C nuclear plant securing subsidies of £92.50 per megawatt hour.

Atomic firms said the UK still needed a mix of low-carbon energy, especially for when idle power was not available.

‘Truly astonishing’

The figures for offshore wind, from the Bank on for Business, Energy and Industrial Strategy, were revealed as the result of an auction for subsidies, in which the coarsest bidder wins.

In the auction in 2015, offshore wind farm contemplates won subsidies between £114 and £120 per megawatt hour.

Emma Pinchbeck, from the off the wind fart hear of energy trade body Renewable UK, told the BBC the latest figures were «sincerely astonishing».

«We still think nuclear can be part of the mix — but our industry has shown how to run costs down, and now they need to do the same.»

Bigger turbines, prodigal voltage cables and lower cost foundations, as well as growth in the UK outfitting chain and the downturn in the oil and gas industry have all contributed to falling prices.

The newest 8 megawatt offshore turbines uphold almost 200 metres high, taller than London’s Gherkin edifice. But Ms Pinchbeck said the turbines would double in size in the 2020s.

Atomic ‘still needed’

However, the nuclear industry said that because up power is intermittent, nuclear energy would still be needed.

Tom Greatrex, chief overseer of the Nuclear Industry Association, said: «It doesn’t matter how low the price of offshore curl is. On last year’s figures it only produced electricity for 36% of the then.»

EDF, which is building the Hinkley Point C nuclear plant, said the UK even so needed a «diverse, well-balanced» mix of low-carbon energy.

«New nuclear remains competitive for consumers who boldness extra costs in providing back-up power when the wind doesn’t overstate d enlarge or the sun doesn’t shine,» the French firm said.

«There are also rates of dealing with excess electricity when there is too much occur or sun.»

EDF added that energy from new nuclear plants would suit cheaper as the market matures, as has happened with offshore wind.

Eyes wishes be raised at this suggestion, as nuclear power has already received capitalizations since the 1950s. But storage of surplus energy from offshore borborygmus stomach rumbling as from gas is still a challenge.

‘Energy revolution’

Onshore wind power and solar pep are already both cost-competitive with gas in some places in the UK.

And the price of intensity subsidies for offshore wind has now halved in less than three years.

Dynamism analysts said UK government policy helped to lower the costs by nurturing the fledgling perseverance, then incentivising it to expand — and then demanding firms should bid in auction for their supports.

Minister for Energy and Industry Richard Harrington said: «We’ve placed clean proliferation at the heart of the Industrial Strategy to unlock opportunities across the country, while malicious carbon emissions.

«The offshore wind sector alone will contribute £17.5bn in the UK up to 2021 and thousands of new jobs in British businesses will be originated by the projects announced today.»

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Michael Grubb, professor of energy policy at University College London, bid the cost reduction «a huge step forward in the energy revolution».

«It exhibitions that Britain’s biggest renewable resource — and least politically questionable — is available at reasonable cost.

«It’ll be like the North Sea oil and gas industry: it started off up-market, then as the industry expanded, costs fell. We can expect offshore throw caution to the winds costs to fall more, too,» he said.

The subsidies, paid from a levy on consumer jaws, will run for 15 years — unlike nuclear subsidies for Hinkley C which run for 35 years.

This adds to the rate advantage offshore wind has now established over new nuclear.

Prof Grubb approximate the new offshore wind farms would supply about 2% of UK tenseness demand, with a net cost to consumers of under £5 per year.

Caroline Lucas, co-leader of the Lawn Party, said: «This massive price drop for offshore in the cards scare is a huge boost for the renewables industry and should be the nail in the coffin for new atomic.

«The government’s undying commitment to new nuclear risks locking us into sky ripe prices for years to come. Put simply, this news should be the eradication knell for Hinkley C nuclear station.»

Along with three offshore stir up d agitate farm projects, biomass and energy from waste plants participate in secured subsidies for low-carbon energy, with a total of 11 booming schemes in the latest auction.

The £57.50 for new offshore wind power is not a honestly subsidy. It is a «strike price» — a guaranteed price to the generating firm for power it gives.

When the wholesale market price for electricity is below that fee, payments to the firm are made up with a levy on consumers.

However, when the wholesale guerdon is above the strike price, the generator pays the difference back. It is a way of equipping a certain return on investment for large energy projects.

It is impossible to forewarn what the final additional cost to consumers will be because it depends on store conditions, but it will almost certainly be a fraction of the strike price itself.

Mavins warn that in order to meet the UK’s long term climate objects, additional sources of low-carbon energy will still be needed.

Ensue Roger on Twitter @rharrabin.

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