- Outstanding auction results with 3.2GW awarded provides further evidence of industry’s success in continued cost reduction, driving innovation and creating UK jobs.
- Winning bids highlight need for continued technology innovation to unlock future potential.
- Offshore wind on track to be at the heart of the UK’s future energy needs
- The strike prices for the successful bids show a continuation of the trend towards bid prices substantially lower than the administrative price ceilings.
- LCOE has already reduced by 32% in the last five years and this trend is set to continue, with the LCoE for the successful projects estimated as £65/MWh for those commissioning in 2021/22 and £51/MWh for those commissioning in 2022/23.
- Today’s auction awards, therefore, indicate a further reduction in LCOE of 33-47% to be achieved in the space of approximately five years.
- Reductions in LCOE will be achieved through a combination of innovation-driven cost reduction and significant reductions in the cost of capital as the industry successfully de-risks and investors and lenders become ever more comfortable with the level of risk.
Andrew Jamieson, Chief Executive of the Offshore Renewable Energy Catapult, said: “We welcome today’s results, and congratulate the successful developers. The auction results are further evidence of the huge progress the industry has made in substantially cutting costs through innovation, creating thousands of UK jobs.
“Technology innovation remains at the heart of driving further cost reduction and remains the critical enabler of this continued downward trajectory and the huge economic benefits that will ensue.
“We look forward to continuing to support businesses of all sizes to accelerate innovation, driving ever increasing quantities of UK content as capacity increases and costs continue to fall, and ensuring that offshore wind becomes the backbone of the UK’s future energy systems.”