Burbo Bank Offshore Wind Farm, Liverpool

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Vitality from offshore wind within the UK shall be cheaper than electrical energy from new nuclear energy for the primary time.

The price of subsidies for brand spanking new offshore wind farms has halved for the reason that final 2015 public sale for clear vitality tasks

Two companies mentioned they have been keen to construct offshore wind farms for a subsidy of £57.50 per megawatt hour for 2022-23.

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

Nuclear companies mentioned the UK nonetheless wanted a mixture of low-carbon vitality, particularly for when wind energy was not accessible.

‘Actually astonishing’

The figures for offshore wind, from the Division for Enterprise, Vitality and Industrial Technique, have been revealed as the results of an public sale for subsidies, wherein the bottom bidder wins.

Within the public sale in 2015, offshore wind farm tasks gained subsidies between £114 and £120 per megawatt hour.

Emma Pinchbeck, from the wind vitality commerce physique Renewable UK, advised the BBC the newest figures have been “actually astonishing”.

“We nonetheless assume nuclear could be a part of the combo – however our business has proven find out how to drive prices down, and now they should do the identical.”

Larger generators, larger voltage cables and decrease price foundations, in addition to progress within the UK provide chain and the downturn within the oil and fuel business have all contributed to falling costs.

The latest eight megawatt offshore generators stand nearly 200 metres excessive, taller than London’s Gherkin constructing. However Ms Pinchbeck mentioned the generators would double in dimension within the 2020s.

Nuclear ‘nonetheless wanted’

Nevertheless, the nuclear business mentioned that as a result of wind energy is intermittent, nuclear vitality would nonetheless be wanted.

Tom Greatrex, chief govt of the Nuclear Trade Affiliation, mentioned: “It would not matter how low the worth of offshore wind is. On final yr’s figures it solely produced electrical energy for 36% of the time.”

EDF, which is constructing the Hinkley Level C nuclear plant, mentioned the UK nonetheless wanted a “numerous, well-balanced” mixture of low-carbon vitality.

“New nuclear stays aggressive for shoppers who face additional prices in offering back-up energy when the wind would not blow or the solar would not shine,” the French agency mentioned.

“There are additionally prices of coping with extra electrical energy when there may be an excessive amount of wind or solar.”

EDF added that vitality from new nuclear crops would develop into cheaper because the market matures, as has occurred with offshore wind.

Eyes shall be raised at this suggestion, as nuclear energy has already obtained subsidies for the reason that 1950s. However storage of surplus vitality from offshore wind continues to be a problem.

‘Vitality revolution’

Onshore wind energy and photo voltaic vitality are already each cost-competitive with fuel in some locations within the UK.

And the worth of vitality subsidies for offshore wind has now halved in lower than three years.

Vitality analysts mentioned UK authorities coverage helped to decrease the prices by nurturing the fledgling business, then incentivising it to broaden – after which demanding companies ought to bid in public sale for his or her subsidies.

Minister for Vitality and Trade Richard Harrington mentioned: “We have positioned clear progress on the coronary heart of the Industrial Technique to unlock alternatives throughout the nation, whereas chopping carbon emissions.

“The offshore wind sector alone will make investments £17.5bn within the UK as much as 2021 and 1000’s of recent jobs in British companies shall be created by the tasks introduced right now.”

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Media captionWorld’s first floating offshore wind farm in Scotland

Michael Grubb, professor of vitality coverage at College Faculty London, known as the associated fee discount “an enormous step ahead within the vitality revolution”.

“It reveals that Britain’s largest renewable useful resource – and least politically problematic – is out there at cheap price.

“It’s going to be just like the North Sea oil and fuel business: it began off costly, then because the business expanded, prices fell. We are able to anticipate offshore wind prices to fall extra, too,” he mentioned.

The subsidies, paid from a levy on client payments, will run for 15 years – not like nuclear subsidies for Hinkley C which run for 35 years.

This provides to the associated fee benefit offshore wind has now established over new nuclear.

Prof Grubb estimated the brand new offshore wind farms would provide about 2% of UK electrical energy demand, with a web price to shoppers of underneath £5 per yr.

Caroline Lucas, co-leader of the Inexperienced Get together, mentioned: “This huge value drop for offshore wind is a large enhance for the renewables business and must be the nail within the coffin for brand spanking new nuclear.

“The federal government’s timeless dedication to new nuclear dangers locking us into sky excessive costs for years to return. Put merely, this information must be the demise knell for Hinkley C nuclear station.”

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Development of the Hinkley Level plant is underneath manner after authorities approval final yr

Together with three offshore wind farm tasks, biomass and vitality from waste crops have secured subsidies for low-carbon vitality, with a complete of 11 profitable schemes within the newest public sale.

Specialists warn that with the intention to meet the UK’s long run local weather objectives, extra sources of low-carbon vitality will nonetheless be wanted.

Observe Roger on Twitter @rharrabin.