Offshore Wind Can Live without Subsidies

Offshore Wind Can Live without Subsidies

June 9, 2017

by Margarita Fournier, Copyright 2016 by Competitive Assets, LLC.  All rights reserved

While constructing wind farms in the ocean is still more expensive than on land, this may change soon. GreenTech Media highlighted a new report from McKinsey, which found “that fast growth, increased investment, bigger wind farms, falling costs, and new technologies are driving new project bids to record lows in Europe.” It predicts “a 68 percent drop in offshore wind prices by 2020, and highlights European projects already hitting grid parity.” “Late last year, the Netherlands approved a bid for its cheapest offshore project yet, €54.50 ($61.10) per megawatt-hour, a sharp drop from the €72.70 ($81.50) per megawatt-hour bid for the same site just five months earlier. Denmark set its own record in a November auction, with a winning bid of €49.90 ($55.94) per megawatt-hour, down 50 percent from 2014. Some of these bids are coming in at grid parity prices as well. In a German auction in April, the average winning bid for the projects was far below expectations, with some bids coming in at the wholesale electricity price – ‘meaning no subsidy is required.’”

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