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III.a.2 Offshore Wind Costs

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Title: III.a.2 Offshore Wind Costs

Content: h1 Technologies costed in this sector

* Offshore wind turbines - Please click on: offshore wind cost data

h1 Costs Methodology

h2 Methodology used

The user defines the number of offshore wind turbines. Once the trajectory is set by the user, the number of plants to be built are defined. Investment costs are a function of new build and operating cost are a function of the number of plants operating within that time period. We assume turbines retire after 20 years and the cost of replacement is included.

Please see 2050 Methodology for a full description of the costs approach in the Calculator.

h2 Methodology issues and uncertainties

* The capacity factor appears quite ambitious in comparison to other models

* Do CAPEX estimates capture connection to grid costs and wider network costs?

# For connection to Grid, Mott Mac FOAK 3rd Round Offshore are modelled as up to 75km from shore in 50 metres of water, giving a high levelised cost of ~£190/MWh. The Offshore Valuation Report [http://www.offshorevaluation.org/downloads/offshore_vaulation_full.pdf] has the highest levelised cost in 2025 of £153/MWh (£226/MWh in 2015) of a floating wind turbine 100-200km from shore. Therefore, it appears that the highest cost range largely captures the cost of floating wind turbines deployed after 2025.

# We have compared the costs here to the capital costs assumed in the offshore valuation report[http://www.offshorevaluation.org/downloads/offshore_vaulation_full.pdf], which included floating wind turbines up to 200km from shore and they did not exceed the high end of the capital cost range.

Mike Knowles comments -  DECC other cost data and it covers all sources IMechE used in EP11/02 used plus Markal, IEA and ESME. The costs for Offshore are very broad e.g., MML working range £1050 to £4276/kW peak and operating costs £30 to £214/kW.  IEA £2725 to £3700/kW capital cost and £191 to £361/kW op costs. They do not give sufficient confidence with such a broad scope of conditions, -distance from shore;water depth etc.. 

Vattenfall's Thanet Array and Ormonde (Barrow)recent offshore projects have been reported as being £2600 to £3200/kW and being actual projects seem consistent with mid-range IEA costs. They are are for nearshore <10kM and 20 to 30m depth waters. Since 2ROCs gives a 20-year income stream of £2.76billion at 35% load factor for the Thanet Array reportedly costing £780M, this  would yield a 12% IRR. and that is for 20 years and is RPI-inflated. 

Would it not be sensible to categorise offshore wind costs for this exercise nearshore <10kM/<30m depth;medium<100km/??m depth and long distance <200kM/??m depth? 

# The wider network costs are captured in the electricity transmission sector

h1 Technical Assumptions

* Lifetime =  20yrs
* Efficiency =  Capacity factor = 35-45%  (linear trajectory from 2010 to 2050)

Mike Knowles comment 35 - 40% is optimistic - LF on unchanged configuration basis averaged over 5 years 2005 to 2010 was 30.8% ref DUKES 2011

* Input Fuel = Wind

h1 Phase I Admin

2050 Costs team lead - Michael Clark 

Working-level analyst - Henry Shennan, Ben Marriot(DECC)

Senior analyst - Sam Thomas, Rocio Concha

Category: Sector by sector cost assumptions



User: Knowlesmichael2

Picture updated at: 

Signed off by: 

Signed off at:
Title: III.a.2 Offshore Wind Costs

Content: h1 Technologies costed in this sector

* Offshore wind turbines - Please click on: offshore wind cost data

h1 Costs Methodology

h2 Methodology used

The user defines the number of offshore wind turbines. Once the trajectory is set by the user, the number of plants to be built are defined. Investment costs are a function of new build and operating cost are a function of the number of plants operating within that time period. We assume turbines retire after 20 years and the cost of replacement is included.

Please see 2050 Methodology for a full description of the costs approach in the Calculator.

h2 Methodology issues and uncertainties

* The capacity factor appears quite ambitious in comparison to other models

* Do CAPEX estimates capture connection to grid costs and wider network costs?

# For connection to Grid, Mott Mac FOAK 3rd Round Offshore are modelled as up to 75km from shore in 50 metres of water, giving a high levelised cost of ~£190/MWh. The Offshore Valuation Report [http://www.offshorevaluation.org/downloads/offshore_vaulation_full.pdf] has the highest levelised cost in 2025 of £153/MWh (£226/MWh in 2015) of a floating wind turbine 100-200km from shore. Therefore, it appears that the highest cost range largely captures the cost of floating wind turbines deployed after 2025.

# We have compared the costs here to the capital costs assumed in the offshore valuation report[http://www.offshorevaluation.org/downloads/offshore_vaulation_full.pdf], which included floating wind turbines up to 200km from shore and they did not exceed the high end of the capital cost range.

Mike Knowles comments -  DECC other cost data and it covers all sources IMechE used in EP11/02 used plus Markal, IEA and ESME. The costs for Offshore are very broad e.g., MML working range £1050 to £4276/kW peak and operating costs £30 to £214/kW.  IEA £2725 to £3700/kW capital cost and £191 to £361/kW op costs. They do not give sufficient confidence with such a broad scope of conditions, -distance from shore;water depth etc.. 

Vattenfall's Thanet Array and Ormonde (Barrow)recent offshore projects have been reported as being £2600 to £3200/kW and being actual projects seem consistent with mid-range IEA costs. They are are for nearshore <10kM and 20 to 30m depth waters. Since 2ROCs gives a 20-year income stream of £2.76billion at 35% load factor for the Thanet Array reportedly costing £780M, this  would yield a 12% IRR. and that is for 20 years and is RPI-inflated. 

Would it not be sensible to categorise offshore wind costs for this exercise nearshore <10kM/<30m depth;medium<100km/??m depth and long distance <200kM/??m depth? 

# The wider network costs are captured in the electricity transmission sector

h1 Technical Assumptions

* Lifetime =  20yrs
* Efficiency =  Capacity factor = 35-45%  (linear trajectory from 2010 to 2050)

Mike Knowles comment 35 - 40% is optimistic - LF on unchanged configuration basis averaged over 5 years 2005 to 2010 was 30.8% ref DUKES 2011

* Input Fuel = Wind

h1 General Comments

Please use this space to make any general comments. Please add your name when commenting.

Category: Sector by sector cost assumptions



User: Joseph Downie

Picture updated at: 

Signed off by: 

Signed off at: