Sian Crampsie

A new report has provided strong evidence that the cost of energy from offshore wind is continuing to fall rapidly.

The second annual Cost Reduction Monitoring Framework (CRMF) report, delivered by the Offshore Renewable Energy Catapult, a joint venture between the UK government and the offshore wind industry, indicates that the cost of energy from offshore wind continued to fall through 2015 and is on track to reach a target of £100/MWh by 2020.

Significant cost reductions have so far been achieved through investment in turbine technology, but the report warns that further cost reductions will require innovation in balance of plant such as cables, foundations and substations.

The report also warns that improved visibility in future rates of deployment are needed in order to help drive investment in research and development.

Benj Sykes, industry co-chair of the Offshore Wind Industry Council, said: "We have continued to see excellent progress in reducing the cost of clean energy from offshore wind. The industry is fast-tracking adoption of new innovation in turbine design and in project operations, putting us ahead of the curve in efforts to bring down the cost of offshore wind.

"We welcome the UK government’s continued strong support for the offshore wind sector. The report shows that further clarity on the timing and volume of future Contract for Difference auctions, and the longer term capacity requirements out to 2030 and beyond, is essential for the industry to galvanise the activity that will deliver further innovation and cost reductions."

Of the 13 cost reduction indicators in the report, all but one are ahead or on target with the milestone set for 2015. The only measure that is behind target is growth and scale. Findings show that industry has already adopted innovations that were not previously expected to significantly drive cost reduction until 2017, particularly in the areas of turbine design and project maintenance.

The report also assessed the degree of confidence that the industry has in delivering further cost savings. It found high confidence of delivery in eight of the indicators, with medium confidence in a further three, to achieve the milestone of £100/MWh in 2020.