Trends in offshore wind economics – the past and the future

Lena Kitzing, Poul Erik Morthorst

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    Abstract

    Expectations to the development of offshore wind are high, especially in Europe. Offshore wind is expected to contribute significantly to the reaching on renewable energy targets, in 2020 and beyond. However, offshore wind power plants are expensive. They currently still cost approximately twice as much as onshore wind. Moreover, upfront investment costs make up to 75% of the total lifetime cost, which makes financing extremely difficult. We investigate the development of offshore wind based on a unique collection of economic data comprising all major offshore wind power plants in Europe. We use our data set to investigate trends in investment cost, operation and maintenance cost, financing and profitability, and identify key economic drivers for offshore wind energy. More specifically, we analyse economic consequences in areas such as project sizes, turbine capacity, distance to shore and water depth, as well as the interrelations of the economic drivers in the areas. We then proceed to analysing industry expectations of cost reductions for offshore wind. This includes both previous cost reduction expectations and in how far they could be realised, as well as current cost reductions. We set them in perspective and identify the most important drivers for cost reductions in European offshore wind in the short and long term.
    Original languageEnglish
    Title of host publicationProceedings - 14th Wind Integration Workshop
    Number of pages7
    Publication date2015
    Publication statusPublished - 2015
    Event14th International Workshop on Large Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Power Plants - Brussels, Belgium
    Duration: 20 Oct 201522 Oct 2015
    Conference number: 14

    Conference

    Conference14th International Workshop on Large Scale Integration of Wind Power into Power Systems as well as on Transmission Networks for Offshore Wind Power Plants
    Number14
    CountryBelgium
    CityBrussels
    Period20/10/201522/10/2015

    Keywords

    • Offshore wind
    • Technology cost
    • Renewable energy

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