The Cost Reduction Monitoring Framework 2016 report shows projects reaching a final investment decision in 2015-16 are achieving a levelised cost of energy of £97/MWh (€112/MWh).
This compares to projects, which completed financing in 2010/11 with a LCOE of £142/MWh (€164/MWh) at 2011 prices.
The report, compiled by ORE Catapult for the OWPB, said technology developments and increased competition among developers have contributed to the fall. This, however, has resulted in a lack of collaboration between the developers.
An increase in confidence among lenders of offshore wind means cost of capital has also reduced, the report said.
Windpower Monthly will release its independent analysis of global wind costs –onshore and offshore – in the February issue.
In its recommendations to the OWPB, the report said the UK should "identify and exploit opportunities to reduce development, consenting and deployment risk in the UK".
It also recommended the government reviews "successful policy and regulation from other European markets that could enhance the UK framework". This is a nod to the Dutch system, which tendered the two Borssele development blocs in 2016 for €72.20/MWh and then €54.50/MW.
The report highlights how quickly costs have come down, outpacing all estimates.
The projects that completed financing in the 2015-2016 reporting period include E.on's 400MW Rampion; Dong Energy's 573MW Race Bank, the 660MW Walney Extension, the 258MW Burbo Bank Extension, and the 1.2GW Hornsea Project One, SSE's 588MW Beatrice, ScottishPower Renewables' 714MW East Anglia 1; and innogy's 336MW Galloper.
Of these projects, which had an average LCOE of £97/MWh, according to ORE Catapult's report, the Beatrice, Hornsea Project One, Burbo Bank Extension, and Walney Extension sites were awarded FID-enabling contract for difference deals by the UK government in 2014.
These four projects will receive a guaranteed strike price of between £150/MWh and £140/MWh under the CfD deal.