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UTILITY WEEK | 15TH - 21ST SEPTEMBER 2017 | 17 This week Experts hail offshore wind's CfD success Low strike price is "hard evidence" that offshore wind technology is 'getting close to maturity'. Analysts have hailed this week's contracts for difference (CfD) auction results as proof that renewables will "fundamentally change the way energy is gener- ated in Great Britain". The second auction round saw the cost of offshore wind fall by more than half since the last auction in 2015, with prices clearing from just £58/MWh from 2022/23. Three offshore windfarms – Triton Knoll, Hornsea Project 2, and Moray – will join eight other renewable schemes to deliver more than 3GW of power, at a total forecast cost of £176.2 million a year (in 2012 prices). Before the auction results, there had been numerous predictions about the offshore wind price, but nothing as low as £58. Speaking to Utility Week, Cornwall senior consultant Tom Edwards said the auction results were "hard evi- dence" that offshore wind "is getting close to maturity and will fundamentally change the way energy is gener- ated in Great Britain". "We can only imagine what would happen if onshore wind and solar were given the same opportunity," he said. "Could they out compete the more traditional base- load technologies as well?" In total 61 per cent of the £290 million auction budget was allocated across four delivery years, peaking at £176 million in 2023/24. Arup's head of economics, Filippo Gaddo, told Utility Week that growth in turbine size from 3MW to up to 10MW played a major role in driving down capex. JH ELECTRICITY Swansea lagoon investors could walk There is a "real risk" that inves- tors in the proposed Swansea Bay Tidal Lagoon will walk away from the project unless the gov- ernment backs it "very soon", a leading MP has warned. In January this year, former energy minister Charles Hendry recommended approval of the £1.3 billion project aer being asked to review it for the govern- ment. However, ministers have yet to decide on whether to approve the 3.2MW project, which received a fillip this week when its backer, Tidal Lagoon Power, announced it had secured a connection to the electricity grid (see story, p4). Labour MP Rachel Reeves asked when the government would to respond to the Hendry review but junior Wales minister Guto Bebb refused to give a firm date. He said: "Although the Hen- dry review was supportive of a tidal lagoon in Swansea, no real financial issues were dealt with in that report." ENERGY Brexit a 'drag' on infrastructure spend Brexit is already acting as a "drag" on investment in new energy interconnector infrastruc- ture, the House of Lords has been told. The Lords EU energy and environment select committee heard Joseph Dutton, policy adviser at energy consultancy E3G, warn that uncertainty over the UK's participation in the pan-European energy framework was already having an impact. "We can't offer clear signals to investors beyond the end of the decade, which is already slowing things down," he said. ELECTRICITY storage will cut transmission costs The widespread use of battery storage in the electricity grid would be credit positive for transmission network operators, according to Moody's. The credit rating agency said the use of battery storage would allow transmission operators to integrate renewable generation at a low cost, providing them with an opportunity to outper- form the regulatory settlement. Graham Taylor, vice presi- dent – senior credit officer at Moody's, said: "By reducing the need for payments to wind and solar generators when there is insufficient grid capacity, and by allowing for lower investment in grid reinforcement, battery storage will slow the increase in customers' energy bills that could otherwise trigger political or regulatory intervention." Offshore wind: unexpected price fall Stock watch 22 20 18 16 UNIPER SHARE PRICE, FIVE DAY Jul 2017 Aug 2017 Sep 2017 UNIPER SHARE PRICE, THREE MONTHS M&A speculation has seen Uniper shares climb steadily over the summer. Parent company Eon is due to divest its 47 per cent stake next year, and rival RWE has been tipped as a potential buyer. Meanwhile, Uniper chief financial officer Christopher Delbrueck told the German press the company could consider dismantling its German gas power stations and reassembling them in Britain. He also suggested Uniper may look to buy stakes in existing gas-fired generation in the UK. 22.5 22.0 21.5 21.0 20.5 (euro) (euro) 7 Sep 8 Sep 11 Sep 12 Sep Finance & Investment