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Wind Energy UpdateMarch 2017
Maf SmithDeputy Chief Executive
About RenewableUK
• UK’s leading renewable energy trade association, founded in 1978.• 400 wind, wave and tidal members.• Influence policy development and represent sector in media.• Involve members via Forums and Working Groups• Lead organiser of conferences, exhibitions, trade delegations,
workshops and seminars.• Providing industry intelligence via Project Intelligence and on-line
Intelligence Hub
• We work across the four Governments of the UK, with offices in London, Cardiff and Belfast, and a close partnership with our sister organisation Scottish Renewables in Glasgow
2
Project Intelligence & online Hub
• Data used in this presentation comes from RenewableUK’s
– Offshore Wind Project Intelligence with Global Offshore analysis– Onshore Wind Project Intelligence with UK Onshore analysis– Marine Energy Project Intelligence with UK wave and tidal analysis
• ReneawbleUK’s new online Project Intelligence Hub is also searchable on contract and project basis, tracking market to date and forecasting ahead
3
Introduction
• Contribution of wind energy today
• Onshore wind intelligence & outlook
• Offshore wind intelligence & outlook
• The emerging policy landscape
Wind Energy key facts and figures
• Renewable electricity is now delivering 25% of GB power needs
• Wind delivering 11.5% of GB power needs, and now outperforming coal power.
Onshore Wind
• Onshore wind now demonstrably the cheapest option for new power generation, with rapid cost reduction
• Onshore wind also enjoys high UK content –currently at 67% - and high local content
RenewableUK (2015)
Onshore wind learning rates
IRENA (2017) The Power to Change: Solar and Wind Cost Reduction Potential to 2025.
Onshore’s onward march
• “Wind and solar keep getting cheaper. While already competitive in a number of countries today without policy support, the cost of onshore wind is expected to drop 41% by 2040.
• “As new wind and solar capacity is added worldwide, generation using these technologies rises ninefold to 10,591TWh by 2040, and to 30% of the global total, from 5% in 2015.
• “By 2040, Germany, Mexico, the UK and Australia all have average wind and solar penetration of more than 50%.
Bloomberg New Energy Finance (2016) New Energy Outlook
Onshore delivery
Onshore delivery
Source: RenewableUK Onshore Wind Project Intelligence
Onshore delivery
Source: RenewableUK Onshore Wind Project Intelligence
Onshore delivery
Source: RenewableUK Onshore Wind Project Intelligence
The Growth of Offshore Wind
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UK Offshore Wind Costs
15
Source KPMG analysis, Cost Reduction Monitoring Framework: Quantitative assessment report – January 2015.
CfD Auction
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Technology CfD Strick Price (£MWh) for projects
commissioning in 2021/22
CfD Strike Price (£MWh) for projects
commissioning in 2022/23
Offshore Wind 105 100
Advanced Conversion Technologies (with or without CHP)
125 115
Anaerobic Digestion (with or without CHP) (>5MW)
140 135
Dedicated Biomass with CHP 115 115
Wave 310 300
Tidal Stream 300 295
European Offshore Wind Costs
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Opportunities in Offshore Wind
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Operational & New-Build Portfolio UK Project Owners
UK Operational Portfolio by Owner Share (%)
UK New-Build Portfolio by Owner Share (%)
19
DONG Energy19%
E.ON13%
Innogy12%
GIB10%
Vattenfall10%
SSE7%
Statoil5%
ScottishPower4%
SWM3%
Other17% DONG
Energy26%
SSE13%
Vattenfall13%
ScottishPower12%
Statoil9%
Fluor6%
Innogy6%
EDPR3%
SDIC Power3%
Other9%
Source: RenewableUK Offshore Wind Project Intelligence
Operational & New-Build Portfolio – Europe
Europe Operational Portfolio by Country (MW)
Europe New-Build Portfolio by Country (MW)
20
5,098
3,283 518 01,271 712 255
0
2,000
4,000
6,000
8,000
10,000
12,000
29,388
21,234 4,100 2,988 1,776 1,355 3,305
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
Source: RenewableUK Offshore Wind Project Intelligence
Total Portfolio – Non-European MW
21
7,430
4,9191,378
700 693 182 114
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
China USA Taiwan India Japan Canada South Korea
Source: RenewableUK Offshore Wind Project Intelligence
Commissioning Forecast – Europe
22
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
UK Germany Netherlands France Denmark Belgium Other Cumulative
Source: RenewableUK Offshore Wind Project Intelligence
In Conclusion
• The future progress of wind energy is seen as inevitable within global market
• UK Government focus is on Industrial Strategy, securing economic opportunities of low carbon generation, while keeping costs down for energy consumers. Wind plays well to both these requirements.
• Onshore wind costs now rival those of traditional alternatives, while avoiding carbon impacts and fuel imports
– UK Government committed to end subsidy and changed English planning laws. – Future schemes will be built without subsidy, but there is strong political support for
this in Scotland, with interest in Wales and NI– High UK content and shift of market to Scotland
• Offshore wind costs now competitive with new nuclear and in-line to be competitive with new gas in mid 2020s
– Sector has a strong pipeline and expectations around delivery of UK supply chain and ongoing cost reduction
– Supply chain investments means UK content increasing rapidly, with investments focused in coastal and manufacturing communities
In Conclusion
• The future progress of wind energy is seen as inevitable within global market
• UK Government focus is on Industrial Strategy, securing economic opportunities of low carbon generation, while keeping costs down for energy consumers. Wind plays well to both these requirements.
• Onshore wind costs now rival those of traditional alternatives, while avoiding carbon impacts and fuel imports
– UK Government committed to end subsidy and changed English planning laws. – Future schemes will be built without subsidy, but there is strong political support for
this in Scotland, with interest in Wales and NI– High UK content and shift of market to Scotland
• Offshore wind costs now competitive with new nuclear and in-line to be competitive with new gas in mid 2020s
– Sector has a strong pipeline and expectations around delivery of UK supply chain and ongoing cost reduction
– Supply chain investments means UK content increasing rapidly, with investments focused in coastal and manufacturing communities
In Conclusion
• The future progress of wind energy is seen as inevitable within global market
• UK Government focus is on Industrial Strategy, securing economic opportunities of low carbon generation, while keeping costs down for energy consumers. Wind plays well to both these requirements.
• Onshore wind costs now rival those of traditional alternatives, while avoiding carbon impacts and fuel imports
– UK Government committed to end subsidy and changed English planning laws. – Future schemes will be built without subsidy, but there is strong political support for
this in Scotland, with interest in Wales and NI– High UK content and shift of market to Scotland
• Offshore wind costs now competitive with new nuclear and in-line to be competitive with new gas in mid 2020s
– Sector has a strong pipeline and expectations around delivery of UK supply chain and ongoing cost reduction
– Supply chain investments means UK content increasing rapidly, with investments focused in coastal and manufacturing communities
In Conclusion
• The future progress of wind energy is seen as inevitable within global market
• UK Government focus is on Industrial Strategy, securing economic opportunities of low carbon generation, while keeping costs down for energy consumers. Wind plays well to both these requirements.
• Onshore wind costs now rival those of traditional alternatives, while avoiding carbon impacts and fuel imports
– UK Government committed to end subsidy and changed English planning laws. – Future schemes will be built without subsidy, but there is strong political support for
this in Scotland, with interest in Wales and NI– High UK content and shift of market to Scotland
• Offshore wind costs now competitive with new nuclear and in-line to be competitive with new gas in mid 2020s
– Sector has a strong pipeline and expectations around delivery of UK supply chain and ongoing cost reduction
– Supply chain investments means UK content increasing rapidly, with investments focused in coastal and manufacturing communities
