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European Supergrid to Cut Offshore Wind Cost by 25%, Panel Says

Sept. 22 (Bloomberg) -- A European “supergrid” connecting the electricity network of Britain to those of mainland Europe could cut the cost of connecting offshore wind farms to the land by a quarter, a panel of U.K. lawmakers said.

Investment in offshore power transmission could also create 775,000 jobs across Europe by 2020, Parliament’s Energy and Climate Change Committee said today in an e-mailed study. It recommended that new wind farms are connected in a way that’s compatible with a supergrid, rather than using individual connections to shore. The government wants to boost offshore wind capacity to 18 gigawatts in 2020 from 1.3 gigawatts now.

“If we continue developing these renewable resources site-by-site, it could be prohibitively expensive,” committee chair Tim Yeo, a lawmaker with the ruling Conservatives, said in a statement. “An integrated and interconnected offshore network would allow us to tap these huge resources cost-efficiently and prepare the ground for a future European supergrid.”

The idea of a supergrid has been promoted by companies including Siemens AG, General Electric Co. and National Grid Plc to make it easier to balance demand with intermittent power generation across Europe, from solar farms in Mediterranean nations to offshore wind turbines in the North Sea.

Creating the grid could eventually cost 200 billion euros ($275 billion), with a first stage of 28 billion euros by 2020, Mainstream Renewable Power Ltd. Chief Executive Officer Eddie O’Connor told the U.K. panel during its evidence sessions.

Super Friends

Assuming it was accompanied by 100 billion euros spending to create 25 gigawatts of offshore windpower, expenditure in the first stage would cancel out the costs of building and running an equivalent amount of gas-powered plants within 8 years, because the wind is a free fuel, O’Connor told the panel.

The supergrid “is about ensuring that Europe’s, and the UK’s, renewable electrical resource is harnessed to the maximum extent, at the most efficient cost and in an integrated manner,” O’Connor said today in an e-mailed statement.

O’Connor is president of the Friends of the Supergrid, an alliance of at least 21 companies that includes Dublin-based Mainstream, Munich-based Siemens, GE of Fairfield, Connecticut, and London-based National Grid.

To contact the reporter responsible for this story: Alex Morales in London at amorales2@bloomberg.net.

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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