The price of offshore wind power has plunged by a third in just a year, said analysts at BloombergNEF, as its latest benchmark prices for new projects also tracked lower onshore wind and solar cost-of-energy as equipment prices fell.
New-build offshore wind has seen the fastest cost fall of any renewable energy source, according to BNEF’s second-half 2019 global benchmark price of $78/MWh – down 32% on the same stage in 2018 and 12% from the first half of the year.
“New offshore wind projects throughout Europe now deploy turbines up to 10MW, unlocking Capex and Opex savings,” said the research group. European auctions are now contracting projects into the 2020s on a zero-subsidy basis or at rates below $50/MWh, as seen in the recent UK CfD round, while the turbine sector continued to up-size with the completion of the first 12MW Haliade-X this month.
BNEF’s onshore wind benchmarks of $47/MWh for new-build onshore wind and $51/MWh for PV projects are down 6% and 11% respectively from the first half of 2019, which the researchers said is “mainly down to cheaper equipment” with a 7% average decline in wind turbine prices since last year.
The research group suggests some ultra-low prices are achievable for “best in class” renewables projects financed this half in some geographies. In Brazil, India, Mexico and Texas it reckons costs can reach $26-31/MWh for onshore wind, while PV will get as low as $27/MWh in India, Chile and Australia.
The BNEF report said: “PV and onshore wind is winning the race as the cheapest sources of new bulk generation with two-thirds of the global population living in countries where PV or wind is the cheapest new electricity generation.”
Storage has also seen a cost decline, said BNEF, estimating $186/MWh for battery storage with four-hour duration, down 35% since early 2018.