British energy regulator Ofgem and the U.K.'s Department of Energy and Climate Change (DECC) have released a report that finds that if offshore wind power projects were interlinked, instead of individual connections being built for each development, it would lead to a substantial decrease in construction and operating costs for offshore wind energy development.
According to the report, this coordinated approach could reduce the cost of offshore connections by 8% to 15%, which would help meet the U.K. government's target of reducing the cost of offshore wind to 100 British pounds/MWh by 2020. It could also pave the way for an offshore network in the North Sea linking wind farms off Britain's coast to other European countries, the report says.
‘Competitive tendering for the ownership of offshore power links is attracting new investment into the [British] energy sector and saving customers money,’ says Robert Hull, commercial managing director for Ofgem E-Serve. "We want to continue making savings, which is why coordinating links, where this can increase efficiency, is so important. We consider we can do this in a way that protects customers while providing stability and certainty for wind farm investors and prospective offshore transmission owners."
"There are a number of ways we can reduce the cost of offshore wind, and this is definitely one of the most exciting," adds Charles Hendry, minister of state for energy. "Linking up power cables between offshore wind farms could make some serious savings, so we would be crazy not to encourage it. These cables could even be linked up to European projects, increasing opportunities for trading electricity."
Ofgem will assess whether anticipatory investment is beneficial to the development of an efficient network. Approval would also depend on other factors. For example, developers and the system operator would have to show that there is demand for capacity to be built and that it will benefit customers.