June 24 (Bloomberg) -- The British Wind Energy Association predicted the industry will produce more U.K. power than nuclear reactors in the next decade and said competition and investment are needed to bring down costs.

“Wind will overtake nuclear in terms of installed capacity within the next four to five years,” Maria McCaffery, chief executive officer of the London-based association, wrote in an e-mail statement. The group, with 499 members in the wind- and tidal-energy industries, released two reports today calling on the U.K. to set policies to connect producers of renewable energy to the country’s power grid.

Britain will have installed offshore wind capacity of as much as 9 gigawatts by 2015, the report said. Wind generation has the potential to provide electricity to every U.K. home by 2020, it said.

The wind industry is suffering from increasing capital costs and needs three to four manufacturers competing to bring down construction costs, the association said. Costs of building wind capacity are forecast to rise for the next few years and then decline from current levels until 2015, the group said.

“We could see prices fall by as much as 20 percent from today’s 3.1 million pounds ($5.1 million) per megawatt” of installed capacity, McCaffery said. “Government must pull out all the stops to accommodate this program.”

Companies developing wind capacity in the U.K. include Iberdrola SA’s Scottish Power Ltd. and Vattenfall AB, Sweden’s largest utility.

To contact the reporter on this story: Mike Anderson at manderson34@bloomberg.net

Last Updated: June 24, 2009 01:38 EDT