The offshore wind energy sector has the potential to realise significant cost reductions if projects planned for development are implemented in a timely fashion.

A new study, commissioned by the German Offshore Wind Energy Foundation and carried out by Fichtner and Prognos AG, has found that the cost of offshore wind power could be reduced by between 31 per cent and 39 per cent provided that development of the sector continues.

Investment costs are the main source of potential savings, says the study, but there is also great potential for savings to be realised in areas such as installation and components such as support structures.

"The identified cost reduction potentials are based on the assumption that offshore wind power will be continuously developed and reach a capacity of 9 GW or more by the year 2023," said Jens Eckhoff, President of the Foundation Offshore-Windenergie. "Offshore wind power has a substantial cost reduction potential. However, the industry can only exploit this potential if there are reliable framework conditions to achieve significant market volumes."

The study analysed the expected cost development of electricity generation from offshore wind power up to 2023. Technological development across the entire value chain along with project experience will help to drive down costs.

The study also shows that due to increasing experience in project planning, plant construction and operation, the risks – and subsequently the financing costs – can be reduced. In addition, improved logistics, such as the use of more powerful ships and an optimised infrastructure, can positively affect the costs of offshore plant operation and maintenance.

The analysis also shows that in an optimum market environment an expanded serial production and increasing competition will contribute to cost reduction. Eckhoff explained: "In Germany, we have a number of projects ready and waiting. Currently they lack the required investment security. In order to be able to use the experience gained from the first German offshore wind farms and to promote the further development of the industry, a timely implementation of these projects is necessary. This way offshore wind energy can make an essential contribution to tomorrow’s energy supply."