Adam Smith Institute

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Offshore wind: Do the numbers stack up?

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On Thursday, September 23rd, the renewables sector celebrated the opening of the 300 MW offshore wind-farm situated off the Thanet coast in Kent. The wind-farm is the largest in the world. And there was understandable pride when the VIPs, including DECC Secretary of State, Chris Huhne, stared out to sea.

Sweden’s leading energy company, the state-owned Vattenfall, has vigorously espoused the cause for renewable energy for many years. Having built wind-farms in the Baltic Sea, it has now installed 100 3MW Vestas turbines off the Thanet coast. The cost of this wind-farm, much of which is related to the cost of the installed turbines themselves, is between £800 million and £900 million. On a per MW basis, this indicates a cost of between £2.5 million and £3 million.

By way of comparison, the cost of new gas-fired plant is c£500,000 per MW. However, the latter needs expensive gas to operate, whereas wind plants receive their power source effectively free of charge. Capacity levels vary markedly as well. Offshore wind-farms will often be able to generate when their power is not needed – when the wind is blowing in the middle of night for example – and may well be literally becalmed during peak hours of demand. Consequently, offshore wind power is unlikely to be suitable for base-load purposes but it still has a contribution to make within a mixed electricity generation system.

More worrying, though, is the Coalition Government’s seemingly lukewarm stance on new nuclear-build. No public subsidies is the current mantra. Hardly the clarion call to persuade EdF and the German Horizon consortium to invest billions of pounds in new nuclear plant, which would provide the base-load power that the UK will need. Are our energy priorities right?