Pricing offshore wind power

Pricing offshore wind power 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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Energy Policy Elsevier

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Publisher
Elsevier
Copyright
Copyright © 2011 Elsevier Ltd
ISSN
0301-4215
DOI
10.1016/j.enpol.2011.07.044
Publisher site
See Article on Publisher Site

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.

Journal

Energy PolicyElsevier

Published: Oct 1, 2011

References

  • Costs of producing miscanthus and switchgrass for bioenergy in Illinois
    Khanna, M.; Dhungana, B.; Clifton-Brown, J.
  • Loss evaluation of HVAC and HVDC transmission solutions for large offshore wind farms
    Negra, N.B.; Todorovic, J.; Ackermann, T.

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