Why the offshore wind industry is about to take off salon.com electricity fallout 4

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In 2010, electricity generated through offshore wind off the European coastline cost around 17 cents per kilowatt hour, more than twice what utilities were paying for power derived from burning gas and coal. The price fell to around 13 cents by 2017. But when Germany and the Netherlands recently awarded some of the first unsubsidized offshore wind contracts, bids had fallen to as little as 6 cents.

What’s driving this decline? A number of factors. Wind turbine blades keep getting longer, doubling in length since 2000. These blades are now nearly as long as football fields — about 270 feet — on 8-megawatt turbines. The extra length means they capture more power, generating more revenue from every turbine.

In addition, offshore wind turbines have grown more reliable, and government subsidies and mandates have incubated and sped the development of Europe’s industry. While electricity from U.S. offshore wind farms will initially cost system operators more in the U.S. than in Europe — as is common with any breakthrough projects – we predict that prices will fall once the market gets bigger here.

The Energy Department projects that there will be a total 86 gigawatts of U.S. installed offshore wind capacity by 2050, about 7 percent of the capacity of today’s grid and only 4 percent of the vast potential to harness this kind of energy. Given the speed with which prices are falling in Europe, we believe that offshore wind could ultimately play an even bigger role than that, especially should the federal government again make fighting climate change a top priority.

In 2010, electricity generated through offshore wind off the European coastline cost around 17 cents per kilowatt hour, more than twice what utilities were paying for power derived from burning gas and coal. The price fell to around 13 cents by 2017. But when Germany and the Netherlands recently awarded some of the first unsubsidized offshore wind contracts, bids had fallen to as little as 6 cents.

What’s driving this decline? A number of factors. Wind turbine blades keep getting longer, doubling in length since 2000. These blades are now nearly as long as football fields — about 270 feet — on 8-megawatt turbines. The extra length means they capture more power, generating more revenue from every turbine.

In addition, offshore wind turbines have grown more reliable, and government subsidies and mandates have incubated and sped the development of Europe’s industry. While electricity from U.S. offshore wind farms will initially cost system operators more in the U.S. than in Europe — as is common with any breakthrough projects – we predict that prices will fall once the market gets bigger here.

The Energy Department projects that there will be a total 86 gigawatts of U.S. installed offshore wind capacity by 2050, about 7 percent of the capacity of today’s grid and only 4 percent of the vast potential to harness this kind of energy. Given the speed with which prices are falling in Europe, we believe that offshore wind could ultimately play an even bigger role than that, especially should the federal government again make fighting climate change a top priority.