A new study has found that the cost of power generated by offshore wind could fall by as much as one third if growth remains steady over the next 10 years.
The study, conducted by German engineering consultancy The Fichtner Group in conjunction with Swiss consultancy Prognos, concluded that consistent growth will engender major cost reductions via economies of scale and by nurturing expertise and expediting innovation.
"Offshore wind power has a substantial cost reduction potential," said Offshore-Windenergie president Jens Eckhoff. "However, the industry can only exploit this potential if there are reliable framework conditions to achieve significant market volumes."
The study analyzed the projected cost of development of offshore wind power over the upcoming decade until 2013, and applied two different development scenarios to three sites considered typical for German offshore wind farms.
"The identified cost reduction potentials are based on the assumption that offshore wind power can be continuously developed and reached a capacity of nine Gigawatt or more by the year 2012," Eckhoff said.
"This is the way to gain project experience, to promote technological innovation, and to significantly decrease costs."
Under the first scenario, which assumes steady development of the market to reach nine gigawatts of installed capacity in Germany by 2023, the cost of offshore wind power falls by 31 per cent on average across all sites by the end of the period.
The second scenario, which outlines an optimum market environment under which total installed capacity reaches 14 gigawatts by 2023, foresees a cost decline of up to 39 per cent.
According to Frank Peter of Prognos, innovation fostered by steady sector growth will be the key to ongoing cost declines.
"The main driver for the cost reduction is a continuous technological development across the entire value-added chain. Particularly regarding investment costs, substantial savings can be achieved," he said. "Costs for support structures and other components as well as for the installation go down. Larger turbines reduce specific investment costs as the energy yield substantially increases."
The study was commissioned by the German Offshore Wind Energy Foundation in conjunction with some of Europe's leading wind power companies, including DONG Energy Renewables, Iberdrola Renovables, Siemens and Offshore Deutschland Zwei.