Utility Week

Utility Week 3rd March 2017

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Page 8 of 31

"Understanding what the world looks like for the 2020s will be very important both for the developer community and the supply chain." "Getting much, much larger volumes of offshore wind into the system will be driven by the success of storage" Benj Sykes, UK country manager, Dong Energy "If I wouldn't be surprised if it cleared Hinkley prices." Hugh McNeal, chief executive, Renewable UK UK offshore wind The great UK success story After less than 20 years, the UK's offshore wind industry is generating more electricity, at a lower price, than many thought possible. Points of view 'O ffshore wind has been a great UK success story," said energy and industry minister Jesse Norman in January this year. That story began in 2000, and it had 'Humber' beginnings. The Blyth Offshore project, with its two 2MWh turbines just a kilometre off the coast, became the first farm, providing enough electricity to power 2,800 homes for a year. That first development was to stand as a test case, to prove the technology. Today, less than 20 years on, it appears to have succeeded. In the Thames Estuary, the London Array's 175 turbines are spread across an area of 122km2, generating enough electric- ity for 446,201 homes. Look a little further down the line and even that will be outdone. If completed as proposed, Hornsea Project Two in the North Sea will have an array of 300 turbines pumping out 1.8GW for an estimated overall investment of £6 billion. And all the while, the cost of the energy generated has been falling. Roll back to 2011 and the average levelised cost of energy for offshore wind was sitting at £140/MW. Today, four years ahead of schedule, it has broken the £100 floor and sits at £97. That fall in the cost is in large the result of the increasing the size of the projects, but there are a number of other factors. Govern- ment has offered subsidies, eased the regu- latory burden on developments and opposed onshore expansion. And industrial development has played a part. From the Siemens factory in Hull and its 1,000 direct jobs to the mammoth MHI Vestas facilities on the Isle of Wight, the big- gest turbines in the world are being built in the UK, supporting a growing supply chain. The sector also appears to find itself well positioned in the current policy climate to play a major role in the government's efforts to decarbonise. But there are still challenges. Policy- makers must continue to provide industry and investors with sufficient guidance and forward planning to ensure confidence. On the technology front, though offshore wind can generate significant amounts of power, it is still restricted by its intermittency, so advances elsewhere must be made to enable it to fulfil its potential. But just what might that potential be? UTILITY WEEK | 3RD - 9Th MaRch 2017 | 9 Generation Review Dong Energy's Hornsea Pro- ject Two will take offshore wind into the realms of gigawatts Between the periods 2010/11 and 2015/16, the cost of offshore wind fell from £142/MWh to £97/ MWh With £290 million in contracts to supply electricity to the grid on offer, success for large-scale developments will offer financial security to take the sector to a new level Offshore wind contributes 5 per cent of the country's electric- ity demand and is on course to rise to 10 per cent by 2020 Advances in energy storage would be a give a big boost to the practicality of wind generation At a glance…

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