Offshore wind could become cheapest energy source in Europe within 10 years

A group of offshore wind companies have pledged that the technology will generate electricity as cheaply as fossil fuels in Europe within a decade – but only if policymakers across the EU take the steps needed to ensure such growth as a matter of urgency.

The pledge and the challenge to ministers are designed to reposition offshore wind as having a strong future in the EU. The European commission has tended to emphasise gas as the priority source of energy security.

In an open letter, chiefs or senior executives from 11 companies wrote: “Offshore wind will be fully competitive with new conventional power generation within a decade. The industry is on track to achieve its cost reduction ambitions and will be an essential technology in Europe’s energy security and decarbonisation objectives.”

However, the executives said this would only happen “with the right regulatory framework”, and they called on politicians across the bloc to create a “stable long-term market for renewables in Europe”.

They said there was “a serious question mark” over what would happen after 2020, when current EU pledges to generate 20% of energy from renewable sources expire. Some governments wanted to put in place new renewable energy targets for beyond the end of the decade, but these have been strongly opposed by the UK and a few allies. Wind companies are considering post-2020 investments now as it takes years for projects to move from the drawing board to construction.

Offshore wind has been considerably more expensive than onshore because of the difficulties of construction and much more robust engineering required. Projects have faced delays and threats of cancellation as a result.

The UK is still the leader in offshore wind, with 46% of the market, but Germany is catching up fast with 30%. The UK’s early lead was largely the result of government pressure on the onshore wind industry, forcing companies to look offshore instead of easier onshore sites.

By 2025, according to the 11 companies, offshore wind should cost no more than €80 a megawatt hour. This is likely to compare favourably with the costs of coal, under carbon penalties, and gas, of which most of the EU’s supply must be imported. It is also lower than the price of generating nuclear electricity; ministers have guaranteed a price of £92.50 a megawatt hour, roughly double current prices, for electricity produced by the Hinkley Point C reactor.

There is now 11GW of offshore wind generation capacity across the EU – less than one-tenth of the 131GW for onshore wind. Taken together, the technologies supply about 11% of electricity demand.