One of the main reasons for building wind farms onshore – rather than offshore – is cost. If the wind farm is constructed in the sea, it can double or triple the cost. Surely – the argument goes – building onshore is a no-brainer because it will keep electricity costs down.
But that argument is flawed because it considers only the construction cost, not the cost to consumers. Building offshore does not triple our electricity bills. The only question that matters is: how much do our bills actually increase?
To answer this question, I’ve calculated how much our electricity bills would increase if Fred Olsen’s industrial-scale wind farm was built offshore rather than – as they plan – across Hope, Kexwith, Holgate, Newsham, and Barningham Moors, which are prominently situated on the Yorkshire Dales skyline.
In practice, it adds only 1–2p per week to our electricity bills. But that needs to be set against the fact we would preserve the natural landscape and character of the Yorkshire Dales. Are we willing to pay 1–2p per week to prevent the industrialisation of the Yorkshire Dales landscape?
A supplementary question is how much would it cost if we built all future wind farms offshore. That is a more complex question, but I address that as well in this blog post.
The cost of building Fred Olsen’s wind farm offshore
Fred Olsen have not published detailed cost estimates for the proposed wind farm at the five moors. To undertake my calculations, I have used a European average of £1 million per megawatt (MW) onshore. Offshore construction costs are commonly cited as 2–3 times that of onshore. But I have used a more realistic £3.4–£4.2 million per MW offshore (around 3.4 to 4.2 times the cost onshore). In UK currency – to keep things simple – I’ll use £1 million/MW onshore and £3.8 million/MW offshore as a mid-point.
Fred Olsen’s industrial-scale wind farm across the five moors is projected to yield 100MW. So, built onshore it would cost £100 million and offshore £380 million. There will be other capital costs for both schemes – such as cables into the national grid, new access roads, environmental mitigation factors, etc. However, it would be reasonable to assume that these are the same for both projects.
Therefore, the marginal construction cost difference between onshore and offshore would be about £280 million. Spread over 25 years, that would start at £11.2 million per year.
An offshore wind farm would also cost more to run and maintain than onshore, which I’ve estimated at an additional £8–10 million per year.
So, the additional cost of putting the windfarm offshore rather than onshore would be roughly £20 million per year.
How much electricity would be produced?
Wind farms do not run at 100% capacity because there are times the wind does not blow in that location, or because the national grid does not need energy when the wind is blowing. A reasonable assumption (derived from Fred Olsen’s own figures) is that the average capacity is 25%.
As there are 8,760 hours in a year, then the typical output is 100MW x 8,760hrs x 25% ≈ 220,000 MWh per year.
How much would consumer costs increase?
At the time of writing, the energy demand for the past year was 266,304 GWh (30.4GW x 8,760hrs) – note this is GWh and not MWh hour as discussed above. A gigawatt hour is 1,000 times more than a megawatt hour.
The average price of electricity over the past year was £81.39/MWh. So, the total cost of electricity paid by consumers – including domestic, business, and industrial users – was nearly £22 billion (266,304 x 1,000 x 81.39).
If, for the sake of illustration, Fred Olsen’s industrial-scale wind farm was already included in that supply, and had been built offshore, then the additional cost to be added to bills would have been around £20 million. That is an increased cost of about 0.09%.
To express this in monetary terms, the average monthly domestic electricity bill is £73.41 – or £16.94 per week. An increase of around 0.09% is approximately 1.5p/week.
What if all future wind farms were offshore?
The UK government’s onshore wind strategy implies the need for 13 GW of additional onshore capacity. That is 130 additional industrial-scale wind farms of a similar size to Fred Olsen’s proposal for the five moors.
If we built all those wind farms offshore instead, the additional cost to our weekly electricity bills would be of the order 1.5p x 130 – roughly £2 per week.
This is the essential question we face: are we willing to industrialise the UK landscape to save around £2 per week?
