Following right on the heels of news about the wind energy business declining by 80 percent in the U.S. if the federal tax credit isn’t renewed comes positive news for the industry out of the UK.

A new report released by industry insiders and government officials states that the costs of offshore wind power generation could be reduced by one-third within the next 8 years. If a concentrated effort is made by all parties, a reduction of more than £3bn a year could be possible, a sizable drop for a technology that is considered one of the most expensive forms of renewable energy.

Current generation costs of about £140/MWh today would drop to about £100/MWh, making offshore wind a much more viable part of the government’s 2009 Renewable Energy Directive goal of producing 15% of its energy needs from renewable sources by 2020.

“Offshore wind will be a vital part of a diverse and secure low-carbon energy mix in the decades ahead – but we are clear that costs must come down. This report shows substantial cost savings can be achieved if action is taken,” said Minister of state for energy Charles Hendry.

To meet the goals of the Directive, the report states that about 18-GW of offshore capacity would have to be built, requiring much bigger turbines, better design, improved installation methods, more competition between equipment providers, and additional government support. However, some Conservatives in Parliament are opposed to incentivizing wind energy and are much more interested in pursuing fossil fuel sources of energy rather than renewables, citing lower costs and proven technologies. And some wind investors would rather see the government left out of the equation all together, stating that its involvement and constantly changing regulations could derail private investment.

“Up until now, we have prided ourselves [in] not having to factor in political risk to our UK investment decisions, but perhaps it is something we may need to consider in the future as we seek to invest billions of pounds in offshore, onshore and marine renewable energy projects. We want to help the UK achieve its carbon reduction targets, and to do this we need certainty and consistency in energy market regulation,” said Keith Anderson, CCO of Scottish Power.

Of course, as a last resort maybe chairman of the Energy and Climate Change Committee Tim Yeo can work on bribing those local residents living on the water who would be most affected by additional offshore wind farms, encouraging them to be an active voice in the further implementation of the technology and thus reducing costs.

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