The average cost of electricity produced by offshore wind could decrease by 15%, to USD 0.108/kWh, by 2022, or 4% per year, according to a new report by International Renewable Energy Agency (IRENA).
The Renewable Power Generation Costs in 2018 report states that offshore wind projects in 2022 would mainly span the range USD 0.06 to USD 0.14/kWh, with projects in Europe ranging from USD 0.06 to USD 0.10/kWh.
In 2018, the cost of electricity from offshore wind declined by around 1% compared to 2017, with a global weighted-average LCoE of USD 0.127/kWh.
This means the decline in LCoE of offshore wind between 2010 and 2018 equals 20%, as the LCoE fell from USD 0.159/kWh.
In Europe, there was a 14% drop in LCoE between projects commissioned in 2010 and 2018, with the largest decline in Belgium amounting to 28%. In Asia, the LCoE reduction stands at 40%, which was driven by China.
Approximately 4.5GW of new offshore wind capacity was commissioned, out of which 40% is concentrated in China, 29% in the UK and 22% in Germany.
The total installed costs of the commissioned projects were 5% lower than those commissioned in 2010 as they fell from USD 4,572/kW to USD 4,353/kW.
According to IRENA, the reduction of offshore wind costs will continue, with auction and Power Purchase Agreement (PPA) results suggesting that by 2020 or 2022 the sector will be highly competitive.