Driving Down Cost Priority to Encourage Investment in OW Sector (UK)
- Business & Finance
Department of Energy & Climate Change has announced that more winds farms have been brought in to a competitive system to drive down the costs of offshore wind.
The offshore transmission regime means that Ofgem can find the most cost-effective investment in the connecting cables and infrastructure for offshore wind power, saving consumers between £200 and £400 million since 2011, according to estimates by independent experts.
Energy Minister, Michael Fallon, said:
“Driving down the costs of offshore wind is a priority to encourage investment in the sector, and will help keep the UK’s place as the best country in the world for offshore wind.”
Investors are now able to bid competitively to maintain and run the high voltage cables and infrastructure between offshore wind farms and the grid, making offshore wind less costly to develop. It also means that projects can move ahead at a faster pace and electricity can be brought onto the grid more quickly. Fifteen wind farms have so far been covered by the regime, which will produce over 4 GW, enough to power nearly 2.8 million homes.
The regime has also been expanded to give wind farm developers the option of asking a winning bidder to construct the transmission assets, as well as maintaining and running them. This means developers will not have to tie up their capital in connecting infrastructure and can plough their funds into constructing more offshore wind farms.
£1.4 billion of infrastructure investment has already been delivered and licensed, with another £1.5 billion in the tender process and billions more in the pipeline. The regime has tapped into new sources of investment, including pension funds.