http://www.energyefficiencynews.com/i/4230/

Offshore wind costs could drop by as much as a third in the long term, according to a report from trade association RenewableUK.

The study, Offshore Wind - Forecasts of Future Costs and Benefits, commissioned from technical consultants BVG Associates by RenewableUK looked at the 'whole-life' costs of projects being built and planned for between now and 2022.

Over the next ten years, the whole-life costs - which include capital expenditure, operational costs and the energy yield - are expected to fall 15% in real terms.

But if market conditions can be made more favourable, those costs could decrease by as much as 33%.

In the short term, while moving projects further offshore and in deeper water will increase capital expenditure (CAPEX) costs, these will be offset by technological improvements and access to better wind resources, which will increase energy yield.

Meanwhile, operational expenditure (OPEX) will decrease over the lifetime of installed wind farms as a smaller number of larger and more reliable turbines are used.

"We can reduce costs by as much as a third over the next decade," says RenewableUK chief executive Maria McCaffery. "But this will need a large enough market to promote competition and drive innovation."

If the industry and the Government work together it should be possible to deliver 20GW by 2020 if costs fall, she adds. The Government must ensure that it stimulates competition and innovation.

And if the Government does get it right, a programme of offshore wind farm installations could support 45,000 long term jobs and add around £60 billion to the UK economy, while saving 800 million tonnes of CO2.