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Siemens forecasts UK offshore wind power subsidies will drop below nuclear

10 March 2017

Subsidy costs for British offshore wind farms should fall below that of new nuclear plants, according to the head of Siemens' UK offshore wind operations. The UK government is under pressure to bring down users' electricity costs at the same time as subsidising low-carbon generation to help meet its carbon emission reduction targets and plug a looming supply gap.

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The next government auction setting prices for new renewable power projects will open in April and Clark MacFarlane, Siemens managing director for offshore wind, told Reuters this could see offshore wind costs fall below new nuclear for the first time.

He said the price would keep falling as the industry found better logistic solutions, new grid solutions, as well as bigger turbines.

French utility EDF was awarded a contract which guarantees the new Hinkley C nuclear power station a price of £92.5 ($112.50) per pounds/megawatt hour (MWh) for the electricity it produces, which is more than double the current wholesale price of electricity.

The cost of producing electricity from wind farms off the coast of Britain has already fallen 32% in the past four years, and averaged around £97 per megawatt-hour (MWh) in the 2015-2016 financial year an industry report said earlier this year.

MacFarlane said increasing the size of wind turbines means automatically cutting the number of turbine towers and foundations needed to produce the same amount of electricity, thereby reducing costs.

Siemens produces turbines for British offshore wind projects at its 310 million-pound ($380 million) manufacturing plant in Hull, northeast England, including Dong Energy and Macquarie's Race Bank project off the nearby coast.

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