The cost of subsidising offshore wind farms has fallen by more than 50% and has now tumbled lower than the price nuclear reactors are charging the UK taxpayer, for the first time ever.
The Department for Business, Energy and Industrial Strategy released figures on Monday 11 September from a UK government Contracts for Difference (CfD) auction where bids to build offshore wind farms were placed by private companies.
Matthew Wright from Danish utility supplier Dong Energy, who won the latest contract, said this is a milestone moment that marks the “next phase” in clean energy and shows wind power has “proved itself” when up against fossil fuel competitors.
In the bidding process, two firms said they were willing to build offshore wind farms in UK waters for a subsidy of £57.50 per megawatt hour for 2022-2023.
This is lower than the price agreed between the UK government and France’s EDF Energy for the new Hinkley Point C nuclear plant, who successfully secured subsidies of £92.50 per megawatt hour.
Hugh McNeal, chief executive officer of Renewable UK, told The Independent: “We knew today’s results would be impressive, but these are astounding.”
The gains have reportedly been made due to bigger turbines and higher voltage cables being made available in the last year.
Wright, said in a statement: “We’ve moved through that phase quicker than I think people might have expected, enabled by successive governments actually having a framework to bring those projects to market.
“And I think that policy has been repaid with the falling cost of the technology, such that we are at the point where offshore is cost competitive with other forms of energy.”
But nuclear firms maintained that in the future, the UK will need a mix of low-carbon energy, especially for when wind power is not available.
Britain has the most installed wind power capacity of any country in the world, according to Renewable UK and on a good day offshore wind can deliver more than 10% of the UK’s total power demand.
In August 2016, Scotland had a whole day where it was able to provide 106% of the country’s energy requirements using only renewable energy.
Environmental group WWF Scotland confirmed that Sunday 7 August saw Scotland’s renewable energy source pump over the required 37,202 MWh needed to operate all homes and businesses.