Aurora Energy Research has found that the UK can deliver its 43GW offshore wind target “cost-neutral for billpayers over the next ten years” if AR7 procures capacity priced up to £94/MWh.
The study, commissioned by RWE, said the government could increase the AR7 budget to buy any amount of fixed bottom offshore wind capacity below that strike price without adding costs for billpayers.
Aurora added that lower wholesale electricity prices from additional offshore wind would offset higher Contracts for Difference levies through to 2035.
The analysis also highlighted wider gains from hitting 43GW, including 45,000 jobs, a 44% cut in gas reliance and a 45% fall in grid carbon emissions by 2035.
Nick Civetta, project leader at Aurora Energy Research, said: “We have determined that, relative to buying no further offshore wind, delivering on government offshore wind targets is possible at no additional cost to the consumer at a strike price of up to £94/MWh, which is over £10 above last year’s allocation round.”
He added: “The key takeaway is that the expansion of the UK offshore wind industry to hit long-stated targets is possible at a price that will not adversely affect billpayers.”
The findings were welcomed by RWE.
Tom Glover, RWE’s UK country chair, stated: “We welcome this new analysis from Aurora demonstrating that the UK’s offshore wind ambitions can be met whilst adding no additional cost to consumer bills.”
He said: “There are no trade-offs required, this can deliver for billpayers, economic growth and clean power at the same time.”