The cost of building offshore wind farms has fallen to a new low, with Sweden’s Vattenfall winning contracts to build two projects in Danish waters for just over 60 euros per megawatt-hour (MWh). That undercuts a previous record set by Denmark’s Dong Energy, which in July won a contract for a project in the Netherlands at 72.70 euros per MWh. Although the prices are not directly comparable with those awarded in the UK, because they exclude grid connection costs which can be up to 30euros/MWh, they are nevertheless substantially cheaper than the most recent UK deals, awarded early last year for about £120/MWh. Magnus Hall, Vattenfall chief executive, said the deals showed it was “able to reduce the costs of offshore wind faster than had been expected, only a few years ago”. Despite the record-breaking low price of the new Vattenfall contracts, the Danish government has warned it could yet scrap the projects as it is concerned the subsidy bill is still too high. Plunging wholesale power prices in Denmark, as in the UK, have pushed up the subsidy required for fixed-price low carbon energy contracts. Another factor helping lower the price for the new Danish sites is that they are only about 5 miles offshore, cutting the installation costs compared with some UK projects that are as far as 75 miles offshore.
Telegraph 14th Sept 2016 read more »