IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v88y2016icp435-444.html
   My bibliography  Save this article

Unravelling historical cost developments of offshore wind energy in Europe

Author

Listed:
  • Voormolen, J.A.
  • Junginger, H.M.
  • van Sark, W.G.J.H.M.

Abstract

This paper aims to provide insights in the cost developments of offshore wind energy in Europe. This is done by analysing 46 operational offshore wind farms commissioned after 2000. An increase of the Capital Expenditures (CAPEX) is found that is linked to the distance to shore and depth of more recent wind farms and commodity prices. Analysis results indicate that these two factors are only responsible for about half of the observed CAPEX increase, suggesting other factors such as turbine market with limited competition also led to an increasing CAPEX. Using CAPEX, Annual Energy Production, Financings costs and Operational Expenditures, the development of average Levelized Cost of Electricity (LCoE) is shown to increase from 120€/MWh in 2000 towards 190€/MWh in 2014, which is a direct result of the CAPEX increase. The results indicate very different LCoE values among European countries, from currently about 100 Euro/MWh in Denmark and Sweden to 150-220 Euro/MWh in all other countries investigated suggesting an effect of national policy frameworks on the LCoE of offshore wind energy.

Suggested Citation

  • Voormolen, J.A. & Junginger, H.M. & van Sark, W.G.J.H.M., 2016. "Unravelling historical cost developments of offshore wind energy in Europe," Energy Policy, Elsevier, vol. 88(C), pages 435-444.
    • Handle: RePEc:eee:enepol:v:88:y:2016:i:c:p:435-444
    DOI: 10.1016/j.enpol.2015.10.047
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421515301749
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2015.10.047?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James M. Boughton & William H. Branson, 1988. "Commodity Prices as a Leading Indicator of Inflation," NBER Working Papers 2750, National Bureau of Economic Research, Inc.
    2. Perveen, Rehana & Kishor, Nand & Mohanty, Soumya R., 2014. "Off-shore wind farm development: Present status and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 780-792.
    3. Prässler, Thomas & Schaechtele, Jan, 2012. "Comparison of the financial attractiveness among prospective offshore wind parks in selected European countries," Energy Policy, Elsevier, vol. 45(C), pages 86-101.
    4. MacGillivray, Andrew & Jeffrey, Henry & Winskel, Mark & Bryden, Ian, 2014. "Innovation and cost reduction for marine renewable energy: A learning investment sensitivity analysis," Technological Forecasting and Social Change, Elsevier, vol. 87(C), pages 108-124.
    5. 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.
    6. Möller, Bernd & Hong, Lixuan & Lonsing, Reinhard & Hvelplund, Frede, 2012. "Evaluation of offshore wind resources by scale of development," Energy, Elsevier, vol. 48(1), pages 314-322.
    7. Junginger, M. & Faaij, A. & Turkenburg, W. C., 2005. "Global experience curves for wind farms," Energy Policy, Elsevier, vol. 33(2), pages 133-150, January.
    8. Klaassen, Ger & Miketa, Asami & Larsen, Katarina & Sundqvist, Thomas, 2005. "The impact of R&D on innovation for wind energy in Denmark, Germany and the United Kingdom," Ecological Economics, Elsevier, vol. 54(2-3), pages 227-240, August.
    9. van der Zwaan, Bob & Rivera-Tinoco, Rodrigo & Lensink, Sander & van den Oosterkamp, Paul, 2012. "Cost reductions for offshore wind power: Exploring the balance between scaling, learning and R&D," Renewable Energy, Elsevier, vol. 41(C), pages 389-393.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sascha Samadi, 2016. "A Review of Factors Influencing the Cost Development of Electricity Generation Technologies," Energies, MDPI, vol. 9(11), pages 1-25, November.
    2. Castro-Santos, Laura & Martins, Elson & Guedes Soares, C., 2016. "Cost assessment methodology for combined wind and wave floating offshore renewable energy systems," Renewable Energy, Elsevier, vol. 97(C), pages 866-880.
    3. Laura Castro-Santos & Elson Martins & C. Guedes Soares, 2016. "Methodology to Calculate the Costs of a Floating Offshore Renewable Energy Farm," Energies, MDPI, vol. 9(5), pages 1-27, April.
    4. Sharay Astariz & Gregorio Iglesias, 2015. "Enhancing Wave Energy Competitiveness through Co-Located Wind and Wave Energy Farms. A Review on the Shadow Effect," Energies, MDPI, vol. 8(7), pages 1-23, July.
    5. Samadi, Sascha, 2018. "The experience curve theory and its application in the field of electricity generation technologies – A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2346-2364.
    6. Satir, Mert & Murphy, Fionnuala & McDonnell, Kevin, 2018. "Feasibility study of an offshore wind farm in the Aegean Sea, Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2552-2562.
    7. Waewsak, Jompob & Landry, Mathieu & Gagnon, Yves, 2015. "Offshore wind power potential of the Gulf of Thailand," Renewable Energy, Elsevier, vol. 81(C), pages 609-626.
    8. Zountouridou, E.I. & Kiokes, G.C. & Chakalis, S. & Georgilakis, P.S. & Hatziargyriou, N.D., 2015. "Offshore floating wind parks in the deep waters of Mediterranean Sea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 433-448.
    9. Castro-Santos, Laura & Filgueira-Vizoso, Almudena & Carral-Couce, Luis & Formoso, José Ángel Fraguela, 2016. "Economic feasibility of floating offshore wind farms," Energy, Elsevier, vol. 112(C), pages 868-882.
    10. Castro-Santos, Laura & Martins, Elson & Guedes Soares, C., 2017. "Economic comparison of technological alternatives to harness offshore wind and wave energies," Energy, Elsevier, vol. 140(P1), pages 1121-1130.
    11. Williams, Eric & Hittinger, Eric & Carvalho, Rexon & Williams, Ryan, 2017. "Wind power costs expected to decrease due to technological progress," Energy Policy, Elsevier, vol. 106(C), pages 427-435.
    12. Pettersson, Fredrik & Söderholm, Patrik, 2009. "The diffusion of renewable electricity in the presence of climate policy and technology learning: The case of Sweden," Renewable and Sustainable Energy Reviews, Elsevier, vol. 13(8), pages 2031-2040, October.
    13. Gosens, Jorrit & Hedenus, Fredrik & Sandén, Björn A., 2017. "Faster market growth of wind and PV in late adopters due to global experience build-up," Energy, Elsevier, vol. 131(C), pages 267-278.
    14. Philipp Beiter & Aubryn Cooperman & Eric Lantz & Tyler Stehly & Matt Shields & Ryan Wiser & Thomas Telsnig & Lena Kitzing & Volker Berkhout & Yuka Kikuchi, 2021. "Wind power costs driven by innovation and experience with further reductions on the horizon," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 10(5), September.
    15. Rubin, Edward S. & Azevedo, Inês M.L. & Jaramillo, Paulina & Yeh, Sonia, 2015. "A review of learning rates for electricity supply technologies," Energy Policy, Elsevier, vol. 86(C), pages 198-218.
    16. Nagababu, Garlapati & Kachhwaha, Surendra Singh & Savsani, Vimal, 2017. "Estimation of technical and economic potential of offshore wind along the coast of India," Energy, Elsevier, vol. 138(C), pages 79-91.
    17. Lindman, Åsa & Söderholm, Patrik, 2012. "Wind power learning rates: A conceptual review and meta-analysis," Energy Economics, Elsevier, vol. 34(3), pages 754-761.
    18. Enrica De Cian & Valentina Bosetti & Alessandra Sgobbi & Massimo Tavoni, 2009. "The 2008 WITCH Model: New Model Features and Baseline," Working Papers 2009.85, Fondazione Eni Enrico Mattei.
    19. Chakraborty, Sankhadeep & Dwivedi, Prasoom & Chatterjee, Sushanta K. & Gupta, Rajesh, 2021. "Factors to Promote Ocean Energy in India," Energy Policy, Elsevier, vol. 159(C).
    20. Grafström, Jonas & Lindman, Åsa, 2017. "Invention, innovation and diffusion in the European wind power sector," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 179-191.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:88:y:2016:i:c:p:435-444. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.