Global: Radically falling costs put offshore wind on track to become cheaper than gas generation

Statkraft, Europe's largest generator of renewable energy, welcomes the latest report by BVG Associates, which outlines how advances in technology the supply chain and policy have combined to put the industry on track to become sustainable without financial support from consumers.

BVG's report highlights the costs of offshore wind are starting to fall sharply as a result of the introduction of large turbines and advances in foundation technology. Continued downward pressure on the cost of energy due to the introduction of even larger and more efficient turbines after 2020 will see offshore wind projects going into construction in 5 years-time that are competitive with new gas plant.

From the late 2020's the repowering of the oldest projects with more advanced technology could see the advent of offshore wind that is below the cost of gas generation, even under the Governments lowest price forecast.

This marks a radical step towards subsidy free offshore wind and will enable the UK to continue to decarbonise through the 2020's cost-effectively, providing "return on investment" for successive governments that have established the UK as the world leader in the industry.

Amber Rudd Secretary of State for Energy and Climate Change commented: "Thanks to Government support the UK is the world leader in offshore wind energy – it's part of our long term plan to foster enterprise, innovation and create jobs as we decarbonise at the lowest cost to hardworking bill payers. We want to help technologies stand on their own two feet, not encourage a reliance on public subsidies and the report points towards progress in this direction."

Jon Vatnaland, Managing Director of Statkraft UK commented: "I welcome the findings of BVG's report, which suggest that offshore wind has a valuable role to play in a cost-effective, secure energy mix. Encouragingly it also indicates the scale of the potential contribution to the UK economy. This is great news for consumers and plans for growth and productivity."

In addition to the provision of cost effective energy, the report suggests the thriving UK offshore wind sector will also deliver:

• A world leading manufacturing and construction supply chain directly creating almost 18,000 long-term, direct jobs by 2025 in manufacturing, construction and operations, mostly in the Northern Powerhouse and coastal areas with traditionally high levels of unemployment
• A significant global export opportunity worth over £200 billion, which will see UK-based companies provide products, services and knowledge to markets throughout Europe, Asia and the USA, replicating the success of North Sea oil and gas and significantly contributing to UK productivity

Bruce Valpy, Managing Director of BVG Associates said: "In the last few years, the offshore wind industry has really 'got it' about both the necessity and the opportunity to drive down cost of energy and make a difference to local economies. From within the industry, we see just how much more there is to come, as long as it keeps the confidence to invest."