Offshore wind can match coal, gas for value by 2025-RWE, E.On, GE, others

Merchant House International

06/06/2016 12:03

* Firms see price at 80 euros per megawatt hour 
    * Nine EU nations agree to cooperate on offshore wind 
 
    BRUSSELS, June 6 (Reuters) - Eleven energy and technology 
firms said on Monday offshore wind can be as cheap as gas and 
coal within a decade, but said European nations must do more to 
ensure a stable legal framework to inspire investment in zero 
carbon generation. 
    Germany's RWE  RWEG.DE , E.On  EON.UL  and Siemens 
 SIEGn.DE  signed an open letter, alongside Norwegian oil firm 
Statoil  STL.OL , Sweden's Vattenfall  VATN.UL  and General 
Electric  GE.N  of the United States, saying they can produce 
for less than 80 euros ($90.80) per megawatt hour per project by 
2025. 
    Together with five other firms active in renewable energy, 
they called on EU energy ministers meeting in Luxembourg for 
regulation to make offshore wind "fully competitive" with 
conventional power stations. 
    "This commitment is only possible with a stable, long-term 
market for renewables in Europe," the 11 firms said. "If the 
offshore industry is to realise its cost reduction goals, a 
strong pipeline of projects is needed." 
    While Europe had a record year for offshore wind farm 
installations in 2015, the companies said a question mark 
remained over the level of government support for the industry. 
    Wind energy provides about 10 percent of EU electricity. The 
28 EU nations agreed in October 2014 on a framework for 2030 
climate goals that includes cutting greenhouse gases by at least 
40 percent versus 1990 and raising the share of renewable energy 
to at least 27 percent, from 20 percent by 2020. 
    Also on Monday, nine European countries, including Germany, 
France and Sweden, signed an accord to work towards joint 
offshore wind farm tenders and to align national subsidy 
schemes.  urn:newsml:reuters.com:*:nL5N18N2UB 
    EU nations set their own tender contracts and subsidies, 
which can complicate the process of bidding for projects for 
pan-European companies.  
    Analysts say the renewable sector is winning the argument 
that is it more viable than nuclear power, which has been hit by 
project delays and high costs. 
    Britain's new nuclear plant Hinkley C, with a start date in 
2025, has been awarded a price of 92.50 pounds ($133.51) per 
megawatt hour. 
    Of the renewables sector, offshore wind alone can offer the 
kind of large-scale generation nuclear plants provide, but costs 
more than onshore wind, which already can be cheap enough to 
compete with fossil fuel. 
    Representatives of the mining and steel sectors say they 
expect coal to remain the most economic fuel source unless the 
EU Emissions Trading System (ETS) gains significantly in value. 
    The ETS, set up to put a cost on carbon and spur investment 
in low carbon energy, is stuck at around 6 euros per tonne 
 CFI2Zc1 , meaning it is cheaper to burn coal than gas, which is 
only half as polluting.    
    ($1 = 0.6928 pounds) 
 
 (Reporting by Alissa de Carbonnel and Barbara Lewis in 
Brussels; Additional reporting by Susanna Twidale in London, 
editing by William Hardy) 
 ((alissa.decarbonnel@thomsonreuters.com; +32 2287 6834)) 
 
Keywords: EUROPE ENERGY/WIND