The Cost of Wind Power: Worse Than We Thought

A few days ago, the BBC's Roger Harrabin mentioned a new suggestion that instead of cutting up redundant oil rigs, we should simply sink them to the bottom of the sea, where they would become artificial reefs that would encourage a flourishing of marine flora and fauna. Observant readers of his Twitter feed were of course quick to point out that this was exactly what BP had proposed for their Brent Spar platform nearly twenty years ago. At the time there was an outpouring from environmentalists, who accused the oil giant of deliberately polluting the seas. The campaign became truly farcical when Greenpeace made the claim - which environmental correspondents, to a man, failed to challenge - that the platform was full of nuclear waste. This was a truly shameful moment.

The reason I mention this story today is that the Department for Business, Energy and Industrial Strategy recently published a paper on the potential decommissioning costs of all those offshore wind turbines that they are so keen on installing. The answer is as follows:

The total estimated decommissioning cost is £1.28bn to £3.64bn...

That's for 34 windfarms, so £100 million each. You can see why there might be a sudden upsurge of interest in creating artificial reefs out of large marine structures rather than having to fork out money to chop them up and take them back to shore.

 

Interestingly, the report also notes this:

...it was acknowledged that earlier studies on the Levelised Cost of Energy from offshore wind...did not account for decommissioning costs, or the cost of procuring securities.

They estimate that if a cash security was required up front, it would add nearly 5% to the levelised cost.