Offshore wind can match coal, gas for value by 2025

Nine EU nations agree to cooperate on offshore wind

 

Offshore wind

A number of major energy companies signed an open letter saying by 2025, they can produce offshore wind power for less than $90.80 per megawatt hour per project.  OffshoreWIND.biz photo.

BRUSSELS, June 6 (Reuters) – Eleven energy and technology firms said on Monday offshore wind can be as cheap as gas and coal within a decade, but said European nations must do more to ensure a stable legal framework to inspire investment in zero carbon generation.

Germany’s RWE, E.On and Siemens signed an open letter, alongside Norwegian oil firm Statoil, Sweden’s Vattenfall and General Electric of the United States, saying they can produce for less than 80 euros ($90.80) per megawatt hour per project by 2025.

Together with five other firms active in renewable energy, they called on EU energy ministers meeting in Luxembourg for regulation to make offshore wind “fully competitive” with conventional power stations.

“This commitment is only possible with a stable, long-term market for renewables in Europe,” the 11 firms said. “If the offshore industry is to realise its cost reduction goals, a strong pipeline of projects is needed.”

While Europe had a record year for offshore wind farm installations in 2015, the companies said a question mark remained over the level of government support for the industry.

Wind energy provides about 10 percent of EU electricity. The 28 EU nations agreed in October 2014 on a framework for 2030 climate goals that includes cutting greenhouse gases by at least 40 percent versus 1990 and raising the share of renewable energy to at least 27 percent, from 20 percent by 2020.

Also on Monday, nine European countries, including Germany, France and Sweden, signed an accord to work towards joint offshore wind farm tenders and to align national subsidy schemes.

EU nations set their own tender contracts and subsidies, which can complicate the process of bidding for projects for pan-European companies.

Analysts say the renewable sector is winning the argument that is it more viable than nuclear power, which has been hit by project delays and high costs.

Britain’s new nuclear plant Hinkley C, with a start date in 2025, has been awarded a price of 92.50 pounds ($133.51) per megawatt hour.

Of the renewables sector, offshore wind alone can offer the kind of large-scale generation nuclear plants provide, but costs more than onshore wind, which already can be cheap enough to compete with fossil fuel.

Representatives of the mining and steel sectors say they expect coal to remain the most economic fuel source unless the EU Emissions Trading System (ETS) gains significantly in value.

The ETS, set up to put a cost on carbon and spur investment in low carbon energy, is stuck at around 6 euros per tonne , meaning it is cheaper to burn coal than gas, which is only half as polluting.

(Reporting by Alissa de Carbonnel and Barbara Lewis in Brussels; Additional reporting by Susanna Twidale in London, editing by William Hardy)

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