Continued efforts are required
Utrecht, November 2nd 2015. In the Netherlands, the stakeholders, both government and market parties, committed to a 40% cost reduction in the Green Deal 2011. In the Dutch 2013 Energy agreement this cost reduction was incorporated in the maximum tender amounts for the five upcoming tenders. Today a report was released which demonstrates that this target is well within reach given the potential of cost reduction in the areas of Technology, Market & Supply Chain and Finance from 2010 and 2020 (at final investment decision). Within these three main categories, the report identifies a number of cost reduction options that can contribute significantly to cost reduction. Although substantial cost reductions are already locked in, meeting the 40% cost reduction target requires continued efforts.
The TKI Wind op Zee (Top consortium for Knowledge and Innovation Offshore Wind) commissioned PwC and DNV GL - with support of Ecofys - to conduct this study. Ernst van Zuijlen, director TKI Wind op Zee: “It is good to have a clear overview on the progress and to see that we are on the right track to reach the goals we set in 2013 in the Energy Agreement. Moreover, continued cost reductions could make offshore wind competitive with conventional forms of generation by 2030. And it may even be much earlier if a sound ETS system can be achieved giving CO2 emissions a real price.”
In the study, PwC and DNV GL conclude that the cost reduction target is feasible, as the assessed cost reduction potential of 46% by 2020, exceeds the target of 40%. This only takes into account the main cost reduction items. The cost reduction potential is possibly even larger if smaller items are also included.
Hans Cleijne (DNV GL): ” The most significant contribution to cost reduction is made by technological innovation, and large steps have already been taken in this area such as innovation of the turbine and XL monopiles.”
Paul Nillesen (PwC):” Market and supply chain cost reduction options, such as improved collaboration and competition, as well as improvements in financing, play a vital role in achieving the target. Stable and committed policies are vital for these cost reduction options to materialize.”
Continued efforts of market parties as well as the government are needed to materialize this potential. Therefore TKI Wind op Zee will continue to work together with stakeholders on innovations to reduce costs for offshore wind.