Offshore wind target can be cost-neutral for consumers

The UK’s offshore wind target can be deliverable at no extra cost to consumers if the budget for the upcoming CfD round is expanded, according to a new report.

The analysis, by Aurora Energy Research, found that the government could increase the AR7 budget to purchase any amount of capacity priced below £94/MWh without adding costs for billpayers.

Aurora said increasing offshore wind deployment leads to lower wholesale electricity prices. As a result, this reduction offsets the rising costs of CfD levies, keeping household energy bills effectively neutral through to 2035.

Nick Civetta, Project Leader at Aurora Energy Research, commented: “The key takeaway is that the expansion of the UK offshore wind industry to hit long-stated targets is possible at a price that will not adversely affect billpayers. Not only will hitting a 43 GW wind target be cost neutral, but it will also create additional jobs and almost halve our reliance on gas and the carbon intensity of energy production in the coming decade.”