The latest research from S&P Global Ratings contends U.S. offshore wind is still uneconomical, especially compared to onshore wind and solar.
The new report, Foresight is 2020: Tailwinds for US Offshore Expansion, suggests that the levelized cost of energy (LCOE) for U.S. offshore wind, excluding an investment tax credit, is about $85 per MWh compared to natural gas and onshore wind, which have a LCOE of $68 per MWh and $40 per MWh, respectively.
“Despite the fact that the cost of wind energy has dropped 70 percent in the past decade, this report shows there’s still a way to go if we’re going to successfully transition away from fossil fuels. The offshore wind sector needs to get to a tipping point where the levelized cost of energy is lower than the marginal cost of fossil fuels, like coal,” says Thomas Leurent, CEO of Akselos.
“Offshore wind developers urgently need to adopt emerging technology to mirror the rapid development pace we’ve seen in solar, which has seen prices drop to nearly $20 per MWh. Demonstrating reliability and profitability is critical to unlocking more investment, and therefore, the sector should be looking to collaborate to get the costs down, as the U.S. Department of Energy has been doing with their digital twin research consortium on the WindFloat Atlantic project,” he adds.
To view S&P Global Ratings full report, click here.