Levelised cost of energy, A challenge for offshore wind. (November 2020)

• Record Type: Journal Article
• Authors: Johnston, Barry; Foley, Aoife; Doran, John; Littler, Timothy
• Is Part Of: Renewable energy. Volume 160(2020)
• Page Start: 876
• Page End: 885
• Publication Date: 2020-11
• Subjects: Offshore wind energy costs -- Policy development -- Electricity market -- Renewable energy -- Levelised cost of energy; Renewable energy sources -- Periodicals; Power resources -- Periodicals; Énergies renouvelables -- Périodiques; Ressources énergétiques -- Périodiques; 333.794
• DOI: 10.1016/j.renene.2020.06.030
• Languages: English
• ISSNs: 0960-1481

Abstract

Abstract: Long-term economic viability of offshore wind power is not only reliant on reducing installation, commissioning, and operations and maintenance costs, but also on the elimination of subsidies and grants. Current economic analyses use historical price and cost data to predict the levelised cost, net present value, payback period and internal rate of return from offshore wind. These analyses use parameters such as water depth at site, number and size of turbines, grid connection costs, equipment costs, revenue from the wholesale market price of electricity, operations and maintenance costs, revenue from subsidies and the cost of finance amongst others to build a model to determine the viability of the array. Here we review the challenges of accurately estimating levelised cost of energy (LCOE) for offshore wind outlining differing approaches to calculating LCOE, the factors influencing this, and the impact of variation in LCOE calculation. Current costs for the production of offshore wind energy are summarised based on publicly available datasets. Highlights: Calculations to determine the Levelised Cost of Energy (LCOE) of offshore wind vary significantly. Auction prices range from €0.00 to 98.30/MWh across Europe. Estimated LCOE up to 100% higher than latest UK auction results. Auction results are influenced by differences in contract arrangements not infrastructure.