We have seen another major milestone for the wind industry in the UK with the release of the results of the third Contracts for Difference auction. Multiple projects secured agreements at the record low strike price of £39.65/MWh.

In the first year of the contracts, the government expects the wholesale capture price for intermittent generators to average £48.13/MWh, meaning wind generators will likely hand back almost £10 to consumers for each megawatt-hour they produce over the 12 months.

If it hadn’t already, the argument that renewables are too expensive to form the backbone of the UK’s energy system has now been put to bed. “Renewables are blowing the competition out of the water,” remarked Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit.

The costs of offshore wind – the dominant technology in the latest auction – have plummeted over recent years. Strike prices have fallen by almost two thirds since the first auction in 2015.

More than anything else, this trend has been driven by increases in turbine size.

But a government-commissioned report, published shortly before the results of the latest auction, raises questions over how long this can continue.

The study by DNV GL Energy explores, among other things, how turbine technology will evolve out to 2035.

The report says in the mid-2000s the largest installed wind turbines were typically around 3-4MW and by 2015 had reached 6-8MW. The most powerful currently available on the market has a capacity of 10MW and will ready for delivery in 2021.

It predicts that two further generations of even larger wind turbines will hit the market by 2035, with GE Renewable Energy’s 12MW Haliade-X model heralding the arrival of the first cohort.

But it adds: “It is expected that increases in turbine size will begin to slow, such that turbines of up to perhaps 15MW are expected by 2035 but that significant increases beyond this capacity are considered unlikely.”

Additional size increases will offer “diminishing returns” in terms of reduced energy costs, which may be better achieved through mass production. These economies of scale erode with turbine size as fewer are required to deliver a given amount of capacity.

The cost of developing and testing a new design would also need to spread over a fewer number of machines. “This is compounded by the requirement for new testing facilities, as very large turbines may soon exceed the capacity of even the largest current test benches,” the report adds.

Furthermore, the key components limiting turbine size will become increasingly important, “requiring more complex and more costly solutions, potentially undoing some of the cost reduction achieved by scale”.

However, Chong Ng, head of applied research at the Offshore Renewable Energy Catapult, believes turbines will go much larger than 15MW.

He says the main limiting factor at the moment is not turbine technology but the size and availability of the cranes needed to install them, which are “very, very expensive”.

“As long as the industry can sort out how to assemble the turbines effectively onshore and ship it out… the size of the turbine can go further,” he adds.

The report suggests there may be difficulty in building gearboxes for turbines of greater than 15MW. Ng says this is not a problem as “anything above 10MW I believe will not have a gearbox.”

He says direct drive turbines have now become “mainstream” and account for most with a capacity of more than 8MW.

Even with the current technology, Ng thinks turbines could feasibly reach 20MW.

Beyond that, he accepts that new materials will be needed to make the turbine blades light enough and strong enough. As the report notes, the weight of a turbine blade is proportional to the cube of its length, meaning at a certain point it is no longer able to support itself.

But Ng believes new materials will arrive, particularly as they will also be needed by other sectors for separate uses.

He also believes there will an incentive to overcome the challenges of going bigger.

Ng says that the turbines themselves typically account for a minority of the lifetime costs of an offshore windfarm. The majority goes towards to installation (12-15 per cent) and operations and maintenance (45 per cent). “That’s a huge amount of money,” he adds.

Fewer turbines means fewer installations with fewer cranes. It also means fewer people getting on fewer ships to perform maintenance less frequently.

For similar reasons, Ng believes floating offshore windfarms, assembled in dry docks before being towed out and anchored to the sea bed, will eventually become cost-competitive: “The prediction is by 2050, the costs of floating wind will be similar to fixed foundation wind.”

The report from DNV GL is more sceptical about the prospects for floating windfarms in the UK. They will allow developers to take advantage of better winds in deeper waters. However, the report argues this may be of limited value in the UK, which already has access to plenty of shallow water in the North Sea.

And it says the additional costs of the “large, heavy” foundations may outweigh the benefits in terms of higher load factors.

Despite their difference, both agree there are still plenty of avenues to explore in terms of cutting costs. One day offshore wind will become a fully mature technology and they will level out, but for the time being there is no sign we have reached that point yet.