FEBRUARY 7, 2021
By Paul Homewood
Despite mounting evidence to the contrary, we keep being assured that offshore wind costs have tumbled to under £50/MWh.
The US Energy Information Administration however don’t agree. They regularly assess the levelised costs of all power sources, and only a year ago calculated that the cost of offshore wind was $115.04/MWh, roughly £84/MWh, at current prices.
Their figure does include transmission costs of $3.15, so excluding this we are looking at £82/MWh.
You cannot of course simply compare generation costs, which the EIA have done, as there are associated system costs involved, as BEIS explain:
As Table 7.1 shows, these hidden costs could range between £15 and £35/MWh for offshore wind. By contrast, CCGT actually results in lower wider system costs (note the levelised cost of £82/MWh for CCGT includes a fake carbon cost of £32/MWh).
Adding these extra system costs on to the US costings will take the true cost of offshore wind power to £100/MWh or more.