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Floating offshore wind and the real options to relocate

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  • Tvedt, Jostein

Abstract

Real options to relocate may improve the profitability of the floating offshore wind industry. Location and market switching can contribute to mitigating parts of the cost disadvantage of floating versus fixed-bottom offshore wind. The article derives optimal relocation strategies and real options values under uncertainty. Risk factors that may increase the value of relocation options include electricity prices, capacity factors, political uncertainty, collateral valuation, environmental issues and technological progress.

Suggested Citation

  • Tvedt, Jostein, 2022. "Floating offshore wind and the real options to relocate," Energy Economics, Elsevier, vol. 116(C).
    • Handle: RePEc:eee:eneeco:v:116:y:2022:i:c:s0140988322005217
    DOI: 10.1016/j.eneco.2022.106392
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    More about this item

    Keywords

    Floating offshore wind; Mobility; Value of flexibility; Real options valuation;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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