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Falling Costs of Offshore Wind Energy Will Stimulate Demand in Europe

18 Nov 14:00 by Steve Walia

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Vattenfall, the Swedish power giant, has said that the plummeting cost of offshore wind power will help to further drive demand across the EU for similar developments. The prediction came from Senior VP Gunnar Groebler, who heads up the utility's wind business.

Earlier in the month, Vattenfall announced that it had been successful in bidding for a new 600MW offshore wind project in the Baltic Sea with a bid to generate green energy at 49.9 euros per MW.

The news came after Dong Energy, the Danish utility firm, announced they had won a project in the Netherlands at a delivery price of 72.2 euros per MWh. At the time, the industry saw this as a breakthrough price, especially when compared to Vattenfall's acquisition of the Horns Rev 3 tender at 103 euros per MWH only last year.

The plummeting prices are certainly stimulating debate across the industry and in public policy making about the value and relative cost-effectiveness of offshore wind energy.

The new Kriegers Flak project win will also make a 'healthy margin' for Vattenfall, according to Groebler, who also sees a stabilisation of prices in the more medium time. However, he explained that higher prices might persist at project sites where geological conditions and weather were assessed as being difficult.

The company is still focusing on Europe as part of its plan to invest five billion euros in green energy by 2020 to support the low-carbon economy. The company has also said that it expects wind energy to become increasingly commercially viable and need fewer government subsidy support guarantees in order to become an alternative to fossil fuels - news that will be welcome to policy-makers in a post-Brexit, post-USA election world.