Britain just gave a huge vote of confidence in the ability of offshore wind power to lead the world’s pivot away from fossil fuels.
In a speech Tuesday, Prime Minister Boris Johnson pledged that the United Kingdom would generate enough electricity from offshore wind to power every UK home within a decade.
The UK government also unveiled a new target for floating offshore wind to deliver 1 Gigawatt of energy by 2030. That’s more than 15 times as much power as floating offshore wind currently generates worldwide, it said. The government promised £160 million ($207 million) to upgrade ports and infrastructure.
Britain must “build back greener” from the coronavirus pandemic in order to accelerate progress towards a legally binding target to reach net zero emissions by 2050, Johnson said in a statement.
Offshore wind has charged ahead this year even as support for other renewables waned amid a slump in global energy spending.
Investment into offshore wind surged to $35 billion in the first half of this year, three times higher than the same period last year and well above the total for 2019, according to Bloomberg New Energy Finance. That more than offset investment declines in solar, onshore wind and biomass.
Investment decisions were made on 28 sea-based wind farms, including off the Netherlands, Taiwan, the United Kingdom and France. A rush to finance and build offshore wind farms in China also boosted investment, according to Tom Harries, head of wind research at Bloomberg New Energy Finance.
While offshore wind farms cost about twice as much to set up as onshore wind farms, they produce a lot more energy, said Tom Edwards, senior modeler at Cornwall Insight, a UK energy consultancy. That’s because the wind turbines themselves can be a lot bigger, enabling them to capture more wind and at lower speeds, he said.
Edwards expects that costs will decline further over time as development increases.
Even BP (BP), one of the world’s biggest oil companies, is moving into offshore wind. Last month the company unveiled a $1.1 billion investment into two US projects that have the potential to power more than 2 million American homes.
In yet another sign of investor enthusiasm for the sector, NextEra Energy (NEE), America’s largest renewable energy company, briefly surpassed oil giant Exxon Mobil (XOM) in market value last Friday, according to UBS. The Florida-based company calls itself the world’s largest generator of wind and solar energy.
“Offshore wind has huge potential to supply cheap, green energy to many nations, perhaps none more so than the United Kingdom,” said Jess Ralston, analyst at the Energy and Climate Intelligence Unit, a non-profit.
The International Energy Agency said in a report last year that offshore wind turbines could generate enough electricity to power every home and business on Earth, although they currently provide less than 1% of global power generation.
The UK government’s target to generate 40 Gigawatts of electricity from offshore wind by 2030, while ambitious, is likely necessary, Ralston added, given that its own advisers say that 75 Gigawatts may be needed from offshore wind to achieve net zero carbon emissions by 2050.
That’s because electrifying the heating and transport systems, both critical to a low-carbon future, will involve a doubling of the electricity demand. By far the biggest threat to Britain’s 2050 ambition comes from the gas heating that keeps the vast majority of its nearly 30 million homes, schools and hospitals warm. While natural gas emits less carbon than coal, the United Kingdom’s heavy dependence on the fossil fuel is deemed unsustainable.
“We need to produce a lot of electricity [to run a low-carbon system]. The best way to do this is with offshore wind,” said Edwards.