Pricing offshore wind power

Andrew C. Levitt, Willett Kempton, Aaron P. Smith, Walt Musial, Jeremy Firestone

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Offshore wind offers a very large clean power resource, but electricity from the first US offshore wind contracts is costlier than current regional wholesale electricity prices. To better understand the factors that drive these costs, we develop a pro-forma cash flow model to calculate two results: the levelized cost of energy, and the breakeven price required for financial viability. We then determine input values based on our analysis of capital markets and of 35 operating and planned projects in Europe, China, and the United States. The model is run for a range of inputs appropriate to US policies, electricity markets, and capital markets to assess how changes in policy incentives, project inputs, and financial structure affect the breakeven price of offshore wind power. The model and documentation are made publicly available.
Keyword: Wind power,Offshore windpower,Breakeven price,Levelized cost of energy
Original languageEnglish
JournalEnergy Policy
Volume39
Issue number10
Pages (from-to)6408-6421
ISSN0301-4215
DOIs
Publication statusPublished - 2011
Externally publishedYes

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