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Large floating offshore wind projects could secure contracts for difference (CfD) electricity strike prices below current wholesale electricity prices as early as 2029, depending on the deployment scenario pursued by the UK, according to a new study. 

Innovation and scale of deployment will drive cost reductions in the near-term, while UK and international deployment rates will push prices down in the longer-term, according to research by ORE Catapult.

ORE Catapult makes a number of recommendations to support the rapid cost reduction of UK floating offshore wind, including raising the target of 1GW of floating offshore wind by 2030 to 2GW, with a further 4GW of CFD-backed floating offshore wind due for deployment in the early 2030s.

The authors also suggest creating an offshore leasing round within the next two years to facilitate access to the most cost-effective deployment areas in England and Wales, specifically the Celtic Sea and north east England.

Their study highlights the “vital role” floating offshore wind will play in the UK’s journey to net zero and towards delivering 100GW of offshore wind by 2050, in line with the published last month by the government’s climate advisers, the Climate Change Committee.

ORE Catapult used GIS (geographic information system) mapping software to develop 75GW, 100GW and 150GW offshore wind deployment scenarios to 2050. GIS mapping provides the ability to capture and analyse spatial and geographic data.

The team developed a cost reduction pathways model to define the associated reduction in the levelised cost of energy of floating offshore wind for each of the scenarios.

In particular, the east and north east of Scotland, within the Celtic Sea, and zones off the north east of England were earmarked as areas of “high potential” for floating offshore wind deployment.

In total, 13 industry partners, key stakeholders, technical advisors, supply chain, finance and insurance organisations took part in the study.

RenewableUK's head of policy and regulation, Rebecca Williams, said that the report showed how floating wind could repeat the success of fixed-bottom offshore wind by achieving “spectacular cost reductions over the course of this decade, to a point where we can generate electricity below the wholesale price”.

She said: “Floating wind has a key role to play in hitting the UK's net zero emissions target – we can't get there without it. 

“As long as industry and government work closely together to support the rapid expansion of floating wind, we can maintain our global lead in this innovative technology and export it worldwide, securing jobs and investment for UK companies.”

She added: “The government has set the industry a target of installing 1GW of floating wind by 2030 as our next step forward, but we think we can aim higher and double that as long as we get the policy framework right."

The UK government hopes to award contracts to 12GW of renewable energy capacity in the next auction rounds, which are scheduled for later this year. 

For the first time, fixed-bottom offshore wind will have a pot to itself in the UK’s next CfD tender rounds rather than compete against other renewable energy technologies. In another first, floating offshore wind projects will also be able to bid for contracts against  “less-established technologies”, such as advanced conversion technologies and tidal stream.