Offshore wind energy may soon be cheaper than fossil fuels

11 leading offshore wind companies signed a document ahead of Monday’s EU Council meeting, stating that within a decade, offshore wind could generate electricity as cheaply as fossil fuels. However, it all relies on EU countries prioritising growth in the industry.

The document states that ‘With the right build out and regulatory framework the industry is confident that it can achieve cost levels below €80/MWh [around £63] for projects reaching final investment decision in 2025, including the costs of connecting to the grid.’

This is a figure which can compete with gas and nuclear power. The UK government has pledged to pay EDF a strike price of £92.50 p/h for energy produced by the Hinkley Point C reactor. Compared to the new price estimates, wind power could be a far cheaper alternative.

Some countries – especially those in Scandinavia – are already heavily focused on green technologies. Others have shown a lack of commitment. Currently, the EU pledges to generate 20% of energy from renewable sources. Although countries such as Germany are catching up, the UK is currently the EU leader in offshore wind production, holding 46% of the market. But the government has recently made somewhat of a U-turn, cutting incentives for renewable energy production. In consecutive budgets, the Chancellor has chosen to support fossil fuels instead. If the UK leaves the EU, it would be free from regulation in this area. This makes the future unclear. Indeed, even if it remains in the EU, these regulations may not be renewed or expanded upon once they expire in 2020.

There needs to be a drive for a secure future before investors will put their trust in the industry. The technology will need to be adopted on a grander scale if it is to be able to deliver competitively low prices.

Is wind power a safe bet?

As long as the wind is blowing, it certainly seems a safe source of renewable energy. The same amount of energy generated from all the plants in the world today could be produced by covering 1% of the planet’s land mass with wind turbines.

Having turned their fortunes around since a bankruptcy scare four years ago, Vestas – the world’s biggest turbine manufacturer – is growing at a huge rate, with £530m net profit recorded in the last year. 62GW of wind power capacity was installed in 2015; a quarter more than the previous year. This is due in part to the cost of producing turbines dropping since the recession, with materials becoming cheaper. Europe’s largest ever onshore wind project was recently announced, due to be built in Norway.

With the wind wind power industry growing at such a rate, many believe it has hit its height, as it will struggle to better recent figures. The industry could also be affected by cuts to subsidies. Furthermore, as with all methods of energy production, there is a finite number of sites on which wind farms can be built.

Offshore wind is expanding as a result; more than 3,000MW of power was generated in Europe’s seas last year. Offshore farms are more expensive, but invite less controversy with local communities. Construction of the world’s largest floating wind turbine farm is soon to begin in Scotland.

Investment in wind farms is expected to increase, with the global deal on climate change agreed in Paris in December. Many consider wind power a low risk, ethical, long term investment.