AmiMoJo shares a report from Ars Technica: Once renewable sources of electricity meet or beat the costs of fossil fuel generation, everything changes. With the immediate financial benefit just as clear as the long-term environmental benefit, utilities turn their attention to how to make it work rather than debating whether it’s worth the investment. Solar and onshore wind technologies have hit this point in recent years, but the unique challenges presented by offshore wind have required different solutions that have taken time to mature. Governments have provided some subsidies to encourage that progress, and global capacity grew to 28 gigawatts last year. But those subsidies make it trickier to calculate how close to cost-competitive offshore wind has become. A team led by Imperial College London’s Malte Jansen worked to compare 41 offshore wind projects in Europe going back to 2005. The researchers’ analysis suggests offshore wind, at least in Europe, is on the cusp of dropping below the price of more traditional generating plants.
Bids to provide electricity in these auctions have ranged from 0 euros to 150 euros per megawatt-hour, with that value setting the minimum guaranteed price. The 0-euro bids came in recent auctions in Germany and the Netherlands, and they represent utilities that were confident in their unsubsidized revenue selling at wholesale market prices. The researchers’ estimates for actual revenue at these wind farms came in at 50-150 euros per megawatt-hour. But the interesting thing is the downward trend over time — dropping about 6 percent per year over the whole time period, and more like 12 percent per year if you start with 2015. For wind farms that won’t start operating until after this year, the range drops to 50-70 euros per megawatt-hour. And 50 euros, the researchers say, is at the “lower end of [cost] estimates for fossil fuel generators.” That means subsidies have also been declining over time. In fact, the average is on track to hit zero by 2025. And if electricity prices rise at all in the coming years, a few wind farms that have already been bid will turn out to be subsidy-free in the final accounting. The researchers paint this as a success story. The researchers report their findings in the journal Nature Energy.
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