Offshore wind has become the latest renewable energy technology to benefit from competitive tender process, with auction programs in northern Europe working to push down generation costs by 22 per cent, according to Bloomberg New Energy Finance. BNEF reports that the levelised cost of electricity (LCOE) from offshore wind has fallen to a benchmark estimate of $126 per megawatt-hour in the second half of 2016 on the back of auction programs in the Netherlands and Denmark, down 22 per cent from H1 2016 and 28 per cent from H2 2015. This has been boosted by the results of recent auction programs, including one in September which saw two offshore wind projects in Danish waters totalling 350MW were awarded to Vattenfall with a record-breaking bid of just €60 ($US67.33) per MWh. In July, another utility, Dong Energy, won a contract to develop a 700MW Dutch offshore array at €72.70/MWh. Other projects, such as those in deep UK waters, are going ahead at higher cost, and this explains why the global benchmark, while falling rapidly, is well above these recent figures from Denmark and the Netherlands.
Renew Economy 2nd Nov 2016 read more »