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Countries Raise the Sails on Offshore Renewables Sector
18 October 2020 | Articles
Wind Power
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The cost of electricity from wind continues to fall, driven by declines in wind turbine prices - prices have fallen by between 44%-78% from their peaks between 2007 and 2010 – balance of plant cost reductions and wind turbine technology improvements, especially larger rotor diameters and higher hub-heights, that mean more energy can be harvested from sites with the same wind speeds.
The global weighted-average cost of electricity of new onshore wind farms in 2019 was USD 0.053/kWh with country/region values of between USD 0.051 and USD 0.099/kWh depending on the region. Costs for the most competitive projects are now as low USD 0.030/kWh, without financial support. Costs are set to continue to decline, with no slowing in wind turbine price declines yet in evidence; continuing advancements in wind turbine technology (resulting in higher energy yields and thus capacity factors), economies of scale and O&M cost reductions.
Offshore wind, with deployment of around 28 GW in 2019 compared to onshore wind with 594 GW, was relatively more expensive than onshore wind but costs have declined from the peak in 2014 to USD 0.115/kWh in 2019, although the weighted-average cost in 2019 in Denmark was USD 0.087/kWh. Cost reductions have been driven by the growing maturity of the industry; the growing competitiveness of the market driven by competitive auctions in both established and new markets; establishment of mature supply chains in regional hubs, economies of scale; and advancements in wind turbine technology driving higher capacity factors and reducing installation costs. These cost reductions have been achieved despite the increasing complexity of projects located farther offshore, in deeper waters with harsher meteorology and oceanography conditions.
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