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The economics of offshore wind

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  • Green, Richard
  • Vasilakos, Nicholas

Abstract

This paper presents an overview of the main issues associated with the economics of offshore wind. Investment in offshore wind systems has been growing rapidly throughout Europe, and the technology will be essential in meeting EU targets for renewable energy in 2020. Offshore wind suffers from high installation and connection costs, however, making government support essential. We review various support policies used in Europe, concluding that tender-based feed-in tariff schemes, as used in Denmark, may be best for providing adequate support while minimising developers' rents. It may prove economic to build an international offshore grid connecting wind farms belonging to different countries that are sited close to each other.

Suggested Citation

  • Green, Richard & Vasilakos, Nicholas, 2011. "The economics of offshore wind," Energy Policy, Elsevier, vol. 39(2), pages 496-502, February.
    • Handle: RePEc:eee:enepol:v:39:y:2011:i:2:p:496-502
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    More about this item

    Keywords

    Offshore wind power Cost analysis Market trends;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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