DONG Energy Confident It Can Achieve Cost Targets

Offshore wind giant DONG Energy has announced its belief that it can bring down the costs of generating offshore wind to below government-set targets by 2020. Like all offshore wind developers, the Danish firm has been told it must reduce the cost of producing offshore power to avoid excessive charges being passed on to the consumer.

The target has been set at £100 per megawatt hour (Mwh), to be achieved by 2020, a goal many industry experts have dismissed as impossible to attain. DONG feels differently, claiming it will be able to cut costs to €100 (£87) per Mwh for investment decisions taken in 2020 – a huge drop from last year’s industry average of €160 per Mwh.

The firm’s UK Wind Power Director, Benji Sykes, commented: ‘It’s very challenging but we think it’s very much a realistic and achievable target.’ As the offshore wind industry is currently subsidised through extra charges added to consumer bills, achieving a cost of £87 per Mwh would be welcomed as a major step forward in commercialising the sector.

Wilding says: High generation costs and consumer subsidies have turned many people against offshore wind. But if, like DONG says, it’s possible to drive costs down to an economically viable level, there’s potentially a great future ahead for this industry.

Source: The Telegraph