U.K.'s World-Leading Plans to Build Out Sea-Based Wind Power Get a Push from Norway

The United Kingdom already has more installed offshore wind power capacity than the rest of the world put together, with nearly 4,000 megawatts out of 7,000 MW globally.  The Department of Energy and Climate Change (DECC) said in 2011 that by 2020 up to 18 gigawatts of offshore wind could be deployed in the country if costs are cut to €118 ($160) per megawatt-hour.

If Dong Energy, the world's largest developer of offshore wind farms, is right in forecasting that the industry can cut the cost to €100 per MWh over the same time frame, the industry should be on a booming path.  But last year, the DECC revised its expectations to between 8 and 16 GW by 2020 as the government set a price for offshore wind of €183 per MWh for the next two years, dropping to €169 per MWh in 2018-19.  The length of the subsidy has also been cut to 15 years from 20.

The changes resulted in mixed reactions in the market.  A few high-profile project cancellations put a temporary question mark over the prospects for offshore wind in the U.K. sector of the North Sea as projects totaling 5,500 MW were scrapped because of high costs.  Yet last week, Norwegian oil giant Statoil and its partner Statkraft said they will go ahead and start building the Dudgeon Offshore Wind Farm off the coast of Norfolk, rekindling hopes about the success of offshore wind in the U.K. sector of the North Sea. The 402 MW project will cost £1.5 billion to build and will provide renewable energy for 410,000 households in the United Kingdom after it begins full production in late 2017.

U.K.'s World-Leading Plans to Build Out Sea-Based Wind Power Get a Push from Norway