ORIGINAL REPORTING: Getting to 'head-spinning' low prices for U.S. offshore wind
Getting to 'head-spinning' low prices for U.S. offshore wind; Projected additions to U.S. offshore wind capacity are expected to drive the emergence of the domestic support system the sector needs to drive prices closer to other generation options.
Herman K. Trabish, Jan. 23, 2018 (Utility Dive)
Editor’s note: The prices for offshore wind continue to drop.
The numbers for U.S. offshore wind show an energy sector that is market-ready and likely on the verge of becoming a power system player. Until now, the U.S. offshore wind industry has been slow to develop. There is only one operational project, with only 30 MW installed capacity and a power purchase agreement price of $0.244/kWh. The just-locked-in price for two projects yet to be built in Maryland has come down drastically, to $0.132/kWh. But even that is nowhere near the high end of the levelized cost for energy reported by Lazard for onshore wind, at $0.06/kWh, or for natural gas, at $0.078/kWh. Researchers and advocates in the U.S. say there are changes within reach that can bring offshore wind costs down.
Wind builders are perfecting methods of identifying where the best winds are. The needed domestic supply chain will respond to the right market signals. And where the market goes, the money will eventually follow, offshore wind experts told Utility Dive. Europe has set the bar for low-price offshore wind so far. Global offshore wind leader Ørsted reported a 63% price drop between 2010 and 2016. In the UK, which has 36% of global installed capacity, the levelized cost dropped 32% from 2010 to 2016 and the current Europe-wide price is projected to drop 67% by 2025, according to the U.S. Department of Enegy's National Renewable Energy Laboratory (NREL). The next big data point, expected to take U.S. offshore wind’s price below the 45% price drop from Block Island to the Maryland projects, will come when prices for the 1600 MW recently approved for Massachusetts and Connecticutt are made public… click here for more