World’s cheapest offshore wind farm to be built in Denmark

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Denmark has just announced that it will build the world’s cheapest offshore wind farm.

Horns Rev 3 is to be built by Vattenfall, a state-owned Swedish company, and according to Reuters “the first turbines at the 400-megawatt capacity, Horns Rev 3 park are scheduled to start supplying power in 2017 at an agreed price of 10.31 euro cents per kilowatt-hour, 32 percent cheaper than in Denmark’s latest project”.

This cut in price could be a sign of offshore wind getting much cheaper after years of staying at a similar price point. However, it seems more likely that it just reflects the almost ideal conditions at Horns Rev.

The existing wind farms at Horns Rev have excellent performance. Horns Rev 2 has a capacity factor of almost 50%, while Horns Rev 1 was a capacity factor of 45%. And presumably part of the difference results from Horns Rev 2 having more efficient turbines.

This is a much higher capacity factor than typical British offshore wind farms, which currently average 35%. (This is officially reported by the UK government, but I can no longer find where since they changed their website was changed.)

The best performing British offshore wind farm has a capacity factor of 40% (see REF). So, Horns Rev 3 is likely to have at least 25% higher output, or more likely 40% higher output than a typical British offshore wind farm.

In addition, Horns Rev is a location which benefits from shallow waters. It is less than 20 km from the Danish coast and the water is no deeper than 15 metres. This is not reflective of most of the offshore wind farms being planned in Britain.

All of the round 3 offshore wind farms in Britain are further from the coast and in deeper water than Horns Rev (see the map here). This will make more expensive again.

This just goes to show that you can’t judge the price of offshore wind, or any energy technology, based on the economics of a single project.