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Pricing offshore wind power

Author

Listed:
  • Levitt, Andrew C.
  • Kempton, Willett
  • Smith, Aaron P.
  • Musial, Walt
  • Firestone, Jeremy

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.

Suggested Citation

  • Levitt, Andrew C. & Kempton, Willett & Smith, Aaron P. & Musial, Walt & Firestone, Jeremy, 2011. "Pricing offshore wind power," Energy Policy, Elsevier, vol. 39(10), pages 6408-6421, October.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:10:p:6408-6421
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    References listed on IDEAS

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    1. Blanco, María Isabel, 2009. "The economics of wind energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(6-7), pages 1372-1382, August.
    2. Sovacool, Benjamin K., 2009. "Contextualizing avian mortality: A preliminary appraisal of bird and bat fatalities from wind, fossil-fuel, and nuclear electricity," Energy Policy, Elsevier, vol. 37(6), pages 2241-2248, June.
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