IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v182y2022ics0040162522003808.html
   My bibliography  Save this article

Technological progress observed for fixed-bottom offshore wind in the EU and UK

Author

Listed:
  • Santhakumar, Srinivasan
  • Smart, Gavin
  • Noonan, Miriam
  • Meerman, Hans
  • Faaij, André

Abstract

Offshore wind is a rapidly maturing low-carbon energy technology, for which the technology cost has increased before starting to decline. In literature, the cost development trends of offshore wind and factors responsible were poorly studied. Understanding the factors contributing to the cost developments and their individual impacts are vital for long-term energy policy actions and investment decisions. Therefore, this study combined three different but highly complementary quantitative methodologies to analyze the technological progress observed for fixed-bottom offshore wind in the EU and UK. The technology diffusion curve was first applied to identify the individual development phases of offshore wind technology. Then, the cost developments observed across the identified phases were quantified using experience curve and bottom-up cost modeling methodologies. In the formative phase of the development process, the offshore wind farm's specific capital expenditure had increased from 2 M€/MW in 2000 to 5 M€/MW in 2010, thereby resulting in negative LR. The increase in specific capital expenditure increased the Levelized Cost of Energy (LCoE) from ~110 €/MWh to above 150 €/MWh. After that, during the upscaling and growth phase, the specific capital expenditure declined from 5.4 M€/MW in 2011 to 3.3 M€/MW in 2020. LR of 8–11 % was observed for specific capital expenditure in this phase. In the same phase, the LCoE declined more rapidly than the specific capital expenditure, i.e., from roughly 150 €/MWh in 2011 to 69 €/MWh in 2020, a 54 % decline. This rapid decline observed in recent years was due to the favorable financing conditions, increased capacity factor, and decreased technology costs, including investment and operational costs. Based on the technological progress assessed for offshore wind and its contributing factors in this study, we also estimated the near-term offshore wind LCoE, 55 €/MWh in 2021–2023 and 48 €/MWh in 2024–2026, which aligns well with recent auction outcomes.

Suggested Citation

  • Santhakumar, Srinivasan & Smart, Gavin & Noonan, Miriam & Meerman, Hans & Faaij, André, 2022. "Technological progress observed for fixed-bottom offshore wind in the EU and UK," Technological Forecasting and Social Change, Elsevier, vol. 182(C).
    • Handle: RePEc:eee:tefoso:v:182:y:2022:i:c:s0040162522003808
    DOI: 10.1016/j.techfore.2022.121856
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162522003808
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2022.121856?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. Ioannou, Anastasia & Angus, Andrew & Brennan, Feargal, 2018. "A lifecycle techno-economic model of offshore wind energy for different entry and exit instances," Applied Energy, Elsevier, vol. 221(C), pages 406-424.
    2. Sovacool, Benjamin K. & Gilbert, Alex & Nugent, Daniel, 2014. "Risk, innovation, electricity infrastructure and construction cost overruns: Testing six hypotheses," Energy, Elsevier, vol. 74(C), pages 906-917.
    3. Colpier, Ulrika Claeson & Cornland, Deborah, 2002. "The economics of the combined cycle gas turbine--an experience curve analysis," Energy Policy, Elsevier, vol. 30(4), pages 309-316, March.
    4. Elia, A. & Taylor, M. & Ó Gallachóir, B. & Rogan, F., 2020. "Wind turbine cost reduction: A detailed bottom-up analysis of innovation drivers," Energy Policy, Elsevier, vol. 147(C).
    5. Dedecca, João Gorenstein & Hakvoort, Rudi A. & Ortt, J. Roland, 2016. "Market strategies for offshore wind in Europe: A development and diffusion perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 66(C), pages 286-296.
    6. Rubin, Edward S. & Yeh, Sonia & Antes, Matt & Berkenpas, Michael & Davison, John, 2007. "Use of experience curves to estimate the future cost of power plants with CO2 capture," Institute of Transportation Studies, Working Paper Series qt46x6h0n0, Institute of Transportation Studies, UC Davis.
    7. Rodrigues, S. & Restrepo, C. & Kontos, E. & Teixeira Pinto, R. & Bauer, P., 2015. "Trends of offshore wind projects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 1114-1135.
    8. Béla Nagy & J Doyne Farmer & Quan M Bui & Jessika E Trancik, 2013. "Statistical Basis for Predicting Technological Progress," PLOS ONE, Public Library of Science, vol. 8(2), pages 1-7, February.
    9. 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.
    10. 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.
    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. Shields, Matt & Beiter, Philipp & Nunemaker, Jake & Cooperman, Aubryn & Duffy, Patrick, 2021. "Impacts of turbine and plant upsizing on the levelized cost of energy for offshore wind," Applied Energy, Elsevier, vol. 298(C).
    13. Schwanitz, Valeria Jana & Wierling, August, 2016. "Offshore wind investments – Realism about cost developments is necessary," Energy, Elsevier, vol. 106(C), pages 170-181.
    14. Wilson, Charlie, 2012. "Up-scaling, formative phases, and learning in the historical diffusion of energy technologies," Energy Policy, Elsevier, vol. 50(C), pages 81-94.
    15. Söderholm, Patrik & Sundqvist, Thomas, 2007. "Empirical challenges in the use of learning curves for assessing the economic prospects of renewable energy technologies," Renewable Energy, Elsevier, vol. 32(15), pages 2559-2578.
    16. Malte Jansen & Iain Staffell & Lena Kitzing & Sylvain Quoilin & Edwin Wiggelinkhuizen & Bernard Bulder & Iegor Riepin & Felix Müsgens, 2020. "Offshore wind competitiveness in mature markets without subsidy," Nature Energy, Nature, vol. 5(8), pages 614-622, August.
    17. de La Tour, Arnaud & Glachant, Matthieu & Ménière, Yann, 2013. "Predicting the costs of photovoltaic solar modules in 2020 using experience curve models," Energy, Elsevier, vol. 62(C), pages 341-348.
    18. Florian Egli & Bjarne Steffen & Tobias S. Schmidt, 2018. "A dynamic analysis of financing conditions for renewable energy technologies," Nature Energy, Nature, vol. 3(12), pages 1084-1092, December.
    19. Nemet, Gregory F., 2009. "Interim monitoring of cost dynamics for publicly supported energy technologies," Energy Policy, Elsevier, vol. 37(3), pages 825-835, March.
    20. Santhakumar, Srinivasan & Meerman, Hans & Faaij, André, 2021. "Improving the analytical framework for quantifying technological progress in energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    21. Ederer, Nikolaus, 2015. "Evaluating capital and operating cost efficiency of offshore wind farms: A DEA approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 1034-1046.
    22. Paul Kerr & Donald R. Noble & Jonathan Hodges & Henry Jeffrey, 2021. "Implementing Radical Innovation in Renewable Energy Experience Curves," Energies, MDPI, vol. 14(9), pages 1-28, April.
    23. Aldersey-Williams, John & Broadbent, Ian D. & Strachan, Peter A., 2019. "Better estimates of LCOE from audited accounts – A new methodology with examples from United Kingdom offshore wind and CCGT," Energy Policy, Elsevier, vol. 128(C), pages 25-35.
    24. Lacal-Arántegui, Roberto & Yusta, José M. & Domínguez-Navarro, José Antonio, 2018. "Offshore wind installation: Analysing the evidence behind improvements in installation time," Renewable and Sustainable Energy Reviews, Elsevier, vol. 92(C), pages 133-145.
    25. Vieira, M. & Snyder, B. & Henriques, E. & Reis, L., 2019. "European offshore wind capital cost trends up to 2020," Energy Policy, Elsevier, vol. 129(C), pages 1364-1371.
    26. Grubler, Arnulf & Nakicenovic, Nebojsa & Victor, David G., 1999. "Dynamics of energy technologies and global change," Energy Policy, Elsevier, vol. 27(5), pages 247-280, May.
    27. Christian Koch, 2012. "Contested overruns and performance of offshore wind power plants," Construction Management and Economics, Taylor & Francis Journals, vol. 30(8), pages 609-622, April.
    28. MacGillivray, Andrew & Jeffrey, Henry & Wallace, Robin, 2015. "The importance of iteration and deployment in technology development: A study of the impact on wave and tidal stream energy research, development and innovation," Energy Policy, Elsevier, vol. 87(C), pages 542-552.
    29. Dismukes, David E. & Upton, Gregory B., 2015. "Economies of scale, learning effects and offshore wind development costs," Renewable Energy, Elsevier, vol. 83(C), pages 61-66.
    30. Jing Meng & Rupert Way & Elena Verdolini & Laura Diaz Anadon, 2021. "Comparing expert elicitation and model-based probabilistic technology cost forecasts for the energy transition," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 118(27), pages 1917165118-, July.
    31. John Warnock & David McMillan & James Pilgrim & Sally Shenton, 2019. "Failure Rates of Offshore Wind Transmission Systems," Energies, MDPI, vol. 12(14), pages 1-12, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hughes, Llewelyn & Longden, Thomas, 2024. "Offshore wind power in the Asia-Pacific: Expert elicitation on costs and policies," Energy Policy, Elsevier, vol. 184(C).
    2. Murshed, Muntasir, 2023. "Efficacies of technological progress and renewable energy transition in amplifying national electrification rates: contextual evidence from developing countries," Utilities Policy, Elsevier, vol. 81(C).

    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. Santhakumar, Srinivasan & Meerman, Hans & Faaij, André, 2021. "Improving the analytical framework for quantifying technological progress in energy technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    2. Santhakumar, Srinivasan & Meerman, Hans & Faaij, André, 2024. "Future costs of key emerging offshore renewable energy technologies," Renewable Energy, Elsevier, vol. 222(C).
    3. Hughes, Llewelyn & Longden, Thomas, 2024. "Offshore wind power in the Asia-Pacific: Expert elicitation on costs and policies," Energy Policy, Elsevier, vol. 184(C).
    4. Elia, A. & Kamidelivand, M. & Rogan, F. & Ó Gallachóir, B., 2021. "Impacts of innovation on renewable energy technology cost reductions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    5. 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.
    6. 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.
    7. Reinhard Haas & Marlene Sayer & Amela Ajanovic & Hans Auer, 2023. "Technological learning: Lessons learned on energy technologies," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 12(2), March.
    8. Sascha Samadi, 2016. "A Review of Factors Influencing the Cost Development of Electricity Generation Technologies," Energies, MDPI, vol. 9(11), pages 1-25, November.
    9. Johnston, Barry & Foley, Aoife & Doran, John & Littler, Timothy, 2020. "Levelised cost of energy, A challenge for offshore wind," Renewable Energy, Elsevier, vol. 160(C), pages 876-885.
    10. Choi, Donghyun & Kim, Yeong Jae, 2023. "Local and global experience curves for lumpy and granular energy technologies," Energy Policy, Elsevier, vol. 174(C).
    11. Elia, A. & Taylor, M. & Ó Gallachóir, B. & Rogan, F., 2020. "Wind turbine cost reduction: A detailed bottom-up analysis of innovation drivers," Energy Policy, Elsevier, vol. 147(C).
    12. Hernandez-Negron, Christian G. & Baker, Erin & Goldstein, Anna P., 2023. "A hypothesis for experience curves of related technologies with an application to wind energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 184(C).
    13. 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.
    14. Vieira, M. & Snyder, B. & Henriques, E. & Reis, L., 2019. "European offshore wind capital cost trends up to 2020," Energy Policy, Elsevier, vol. 129(C), pages 1364-1371.
    15. Russell McKenna & Stefan Pfenninger & Heidi Heinrichs & Johannes Schmidt & Iain Staffell & Katharina Gruber & Andrea N. Hahmann & Malte Jansen & Michael Klingler & Natascha Landwehr & Xiaoli Guo Lars', 2021. "Reviewing methods and assumptions for high-resolution large-scale onshore wind energy potential assessments," Papers 2103.09781, arXiv.org.
    16. McKenna, Russell & Pfenninger, Stefan & Heinrichs, Heidi & Schmidt, Johannes & Staffell, Iain & Bauer, Christian & Gruber, Katharina & Hahmann, Andrea N. & Jansen, Malte & Klingler, Michael & Landwehr, 2022. "High-resolution large-scale onshore wind energy assessments: A review of potential definitions, methodologies and future research needs," Renewable Energy, Elsevier, vol. 182(C), pages 659-684.
    17. Vetters, Jade & Thomassen, Gwenny & Van Passel, Steven, 2024. "Sailing through end-of-life challenges: A comprehensive review for offshore wind," Renewable and Sustainable Energy Reviews, Elsevier, vol. 199(C).
    18. Lafond, François & Bailey, Aimee Gotway & Bakker, Jan David & Rebois, Dylan & Zadourian, Rubina & McSharry, Patrick & Farmer, J. Doyne, 2018. "How well do experience curves predict technological progress? A method for making distributional forecasts," Technological Forecasting and Social Change, Elsevier, vol. 128(C), pages 104-117.
    19. Rezaei, Mostafa & Akimov, Alexandr & Gray, Evan MacA., 2024. "Techno-economics of renewable hydrogen export: A case study for Australia-Japan," Applied Energy, Elsevier, vol. 374(C).
    20. Strupeit, Lars & Neij, Lena, 2017. "Cost dynamics in the deployment of photovoltaics: Insights from the German market for building-sited systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 69(C), pages 948-960.

    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:tefoso:v:182:y:2022:i:c:s0040162522003808. 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.sciencedirect.com/science/journal/00401625 .

    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.