The offshore wind market is set to experience a significant improvement in Levelized Cost of Electricity (LCOE) over the next five years, as technology and supply chain gains improve, according to the renewables market analyst MAKE.
The improvements in LCOE within the offshore market will be mainly driven by infrastructure investments in the North Sea and the introduction of the latest generation of 7MW+ turbines.
The rapidly emerging Chinese offshore market is expected to be favourably positioned against versus western rivals, due to substantial nearshore development and low cost position, according to MAKE.
The global renewable energy industry has experienced tremendous growth, leading to a sustained improvement in cost effectiveness, with wind and solar experiencing cost reductions and performance improvements that position these technologies alongside traditional forms of fossil fuels for power generation, MAKE said.
Added costs of environmental controls have reduced the cost effectiveness of many fossil fuels, despite record low fuel prices. Wind and solar have reached significant economies of scale in many countries, and performance and cost positions are continuing to improve, providing a positive outlook for future LCOE gains.