Analysis & Insight

Impact of Oil Price on Offshore Wind

Published 1 September 2020

Offshore wind is at the centre of the UK decarbonisation strategy, with lower costs than many other forms of electricity generation, including new nuclear, and aspires to limit the traditional role oil and gas play in the energy system balance. Oil is a commodity characterised by high volatility in price and has a significant direct and indirect impact on global economic growth. There are several visible and less visible relationships and areas of competition between the two industries, but it appears that the influence of oil price on offshore wind costs is, and will continue to be, in decline. Angeliki Spyroudi investigates the impact that oil price may have on the cost of offshore wind in the UK, specifically looking at:

  • offshore wind vessel supply cost in installation and operations and maintenance (O&M);
  • commodity prices affecting offshore wind (e.g. steel and copper);
  • fuel prices affecting offshore wind;
  • development, project management and O&M services crossing over between oil and gas and offshore wind; and
  • investment in electricity generation from renewables compared to conventional fuel.