Although subsidies have been cut for many renewable generators in recent years, some newer technologies are still eligible for support. Today the government announced the results of an auction which decided the level of subsidy that would go to a number of new renewable generation projects – most of which were offshore wind farms.
There’s been a lot of attention on the outcome of the auction because the final price has come out much, much lower than anyone expected – halving in just two years. We all knew offshore wind technology was getting cheaper, but even those optimistic about its prospects have been left surprised by this one. This is exceptionally good news, but is far from a one-off.
The falling cost of offshore wind is the next great chapter in the long story of renewable success. The cost of renewables is plummeting; onshore wind costs have fallen by two-thirds since the early 80s, and the cost of solar has more than halved in just five years between 2010 to 2015. Battery storage, which we think is going to a game changer for enabling more renewables, is also expected to go the same way. The rapid cost reductions of renewables contrast starkly with new nuclear power.
The fast falling cost of renewables is fantastic news both for bill-payers and the planet. It demonstrates that, as we have argued for a long time, the transition to a 100% renewable energy system in the UK is not a case of ‘if’, but ‘when’. However, with today’s announcement it is looking likely to be much sooner than we all might have thought.