Offshore Wind Undercuts Nuclear in ‘Watershed’ UK Auction
Britain’s government accepted bids from developers of nearly a dozen new energy projects on Monday at prices lower than the one it has guaranteed the French company building the country’s newest nuclear power plant, Hinkley Point C, in Somerset.
Under the accepted bids, new offshore wind generation will come online in 2021-22 at a price of £74.75 per megawatt-hour. Later additions in 2022-23 would cost £57.50 per MWh. By contrast, the government has guaranteed France’s EDF £92.50 per MWh for the output from Hinkley.
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At £57.50, or €63.30 at current exchange rates, the price for the later blocks of power will be lower than the €65 per MWh price point that EU trade association WindEurope recently forecast might be achieved by 2030.
“I think it’s a watershed moment for renewables,” RenewableUK Executive Director Emma Pinchbeck told The Guardian. “It means large-scale renewable generation will be cheaper than incumbent technologies. The idea that renewables are expensive is going to be undermined.”
The Guardian credited the tumbling price to “developers using much bigger turbines than half a decade ago, and less steel in the foundations that attach them to the seabed. The sector is also now perceived to be a much lower risk, bringing down the cost of capital.”