The costs of offshore wind in the UK have increased substantially since the first commercial scale wind farms were deployed in the early 2000s, driven both by underlying cost increases (commodity prices rises, currency fluctuations) and by more specific factors such as supply chain bottlenecks, sub-optimal reliability and the move to deeper water sites. Recent wind farm projects have indicated that costs have stabilised at around £140 per MWh (for projects at Final Investment Decision in 2011).
At the same time, Government and industry are facing important decisions regarding the size of the offshore wind industry and investment in new technologies and facilities. Future costs will be critical in determining the future size of the industry in the UK. This study has produced a rigorous and validated assessment of the potential for offshore wind power cost reduction. It is based on unprecedented engagement with and challenge from around 120 companies and organisations and individuals from the offshore wind industry, insurance, academic and finance communities over a period of six months.