UK Floating Wind Could Be Subsidy-Free by 2030
According to a new study from Offshore Renewable Energy (ORE) Catapult, large floating wind projects in the UK could secure Contracts for Difference (CfD) strike prices below current wholesale electricity price forecasts in 2029.
Reaching the point of having “subsidy-free” floating wind projects depends on the deployment scenario pursued by the UK, according to the Floating Offshore Wind: Cost Reduction Pathways to Subsidy-Free study by ORE Catapult’s Floating Offshore Wind Centre of Excellence (FOW CoE).
The study highlights the vital role floating wind will play in the UK’s journey to Net Zero and towards delivering 100 GW of offshore wind by 2050, in line with the recent Climate Change Committee’s Sixth Carbon Budget.
FOW CoE, within its Cost Reduction Pathways project, used GIS mapping software to develop 75 GW, 100 GW and 150 GW offshore wind deployment scenarios to 2050, and defined an initial 20 GW of floating offshore wind projects in detail – in terms of location, scale and technology deployed. The team developed the Cost Reduction Pathways Model (CRPM) to quantify the associated reduction in the Levelised Cost of Energy (LCOE) of floating offshore wind for each of the scenarios.
Areas off the East and North East of Scotland, within the Celtic Sea and off the North East of England have been identified as areas of high potential for short and medium term floating offshore wind deployment.
The CRPM highlights the critical role of both deployment rates and innovation in floating offshore wind cost reduction. In the short term and medium term, the primary driver of UK floating offshore wind cost reduction is scale of UK deployment, augmented by innovation. In the longer term, the primary driver is innovation, augmented by UK and international deployment rates.
To support the rapid cost reduction of UK floating offshore wind, the study recommends raising the target of 1 GW of floating offshore wind by 2030 to 2 GW, with a further 4 GW of floating offshore wind in receipt of a CfD for deployment in the early 2030s. An offshore leasing round should be established in the next two years to facilitate access to the most cost-effective deployment areas in England and Wales, specifically the Celtic Sea and North East England, according to the study.
It has been highlighted that early support for technology innovation is needed to drive long-term cost reduction and maximise UK content in floating wind projects.
“It is vital the UK takes a strategic approach to supporting the rapidly developing industry UK floating wind industry to ensure the potential benefits are realised. This study provides a strong evidence base for key policy decisions relating to the growth and scale of the industry in the UK – both in terms of the focus for support, and timing”, said Chris Hill, Operational Performance Director, ORE Catapult and FOW CoE Executive Governance Board Co-Chair.