Offshore wind in Europe won’t need subsidies much longer

Offshore wind farm against a gray sky.

Enlarge (credit: Paul /

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.

Subsidies and auctions

Bids for constructing these offshore wind farms came in through
national auctions, which included subsidies with varying
structures. They all offered guaranteed prices for the generated
electricity. Some promise to pay the difference when the market
rate drops below the guarantee while allowing the wind-farm
operator to increase profits when the market rate rises above the
guarantee. Others require the utility to return excess profits when
the market rate is high. And each country has a different limit on
how long the guarantees last, whether that’s a set number of
years or a set amount of electricity sold.

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Source: FS – All – Science – News
Offshore wind in Europe won’t need subsidies much