UK sufferes drop in subsidies for offshore windfarms

Subsidy costs for British offshore windfarms are likely to fall below that of new nuclear plants in next month’s UK government auction, the head of Siemens offshore wind turbines business has said.

The UK government is under pressure to bring down users’ electricity costs at the same time as subsidising low-carbon generation to help meet its carbon emission reduction targets and plug a looming supply gap.

The next government auction setting prices for new renewable power projects will open in April and Clark MacFarlane, Siemens managing director for offshore wind, said this could see offshore wind costs fall below new nuclear for the first time.

“I predict the price for offshore wind in the upcoming auction will be lower than that given to Hinkley,” he told Reuters.

“The price will keep coming down, as we find better logistic solutions, new grid solutions, as well as bigger turbines,” he said.

French utility EDF was awarded a contract which guarantees the new Hinkley C nuclear power station will get a price of £92.50 (€106.58) per pounds-megawatt hour (MWh) for the electricity it produces.

That is more than double the current wholesale price of electricity.

The cost of producing electricity from wind farms off the coast of the UK has already fallen 32% in the past four years.

The costs have averaged around £97 per MWh in the 2015-2016 financial year, an industry report said earlier this year. n Reuters

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