Offshore windfarm deemed 'unprofitable', report confirms
The report confirms that the UK’s newest offshore wind farms remain high-cost operations. Indeed, the academics who produced the report have said the forthcoming Dogger Bank wind farms will be unprofitable, and are essentially worthless, with a value of around minus £1bn in current terms. The findings have not been disputed by the developers.
The findings, however, are just the visible tip of a very large iceberg of unprofitable offshore wind projects that are threatening to hit pension funds heavily invested in similar renewable energy schemes. The report confirms a series of findings published by the GWPF and other sources, which show that offshore wind costs are very high, at best are only falling slowly, and are far above the auction strike prices being agreed.
Andrew Montford, Deputy Director of Net Zero Watch said: “We have been warning since 2017 that there has been no revolution in offshore wind costs. Every time we get new financial data from offshore wind farms, the cost estimates go up. Just this week, our estimates for the Seagreen 1 wind farm have increased by nearly 20%, and those for Dogger Bank by a similar amount.”
The Government’s net zero plans rely on a five-fold increase in the wind fleet, mostly from offshore developments, and an extraordinary decline in the cost of the power it produces.
The latest findings mean that the costs of delivering net zero will increase by hundreds of billions of pounds, and probably by trillions.
Craig Mackinlay MP, the chairman of the parliamentary Net Zero Scrutiny Group, said: "It is becoming increasingly obvious that our dash for renewables, notably wind, is failing on the two key criteria of energy security and affordability. An avoidable energy crisis is approaching but sadly our government is yet to recognise it."
Dr Benny Peiser, Net Zero Watch Director said: “The Climate Change Committee’s Net Zero plan has already been shown to have used wildly optimistic assumptions on the cost of renewable energy. The Norwegian report is another nail in the coffin of its credibility."
The Climate Change Committee is chaired by Lord Deben, who stood down as chairman of Forewind, the Consortium that is developing the £9bn Dogger Bank wind farm, when he took on the role of CCC chairman.
He was replaced by Charles Hendry, who had previously been a minister in the then Department of Energy and Climate Change.