Abstract
The offshore wind (OW) industry has reached reasonable maturity over the past decade and the European market currently consists of a diverse pool of investors. Often equity investors buy and sell stakes at different phases of the asset service life with a view to maximize their return on investment. A detailed assessment of the investment returns taking into account the technical parameters of the problem, is pertinent towards understanding the value of new and operational wind farms. This paper develops a high fidelity lifecycle techno-economic model, bringing together the most up-to-date data and parametric equations from databases and literature. Subsequently, based on a realistic case study of an OW farm in the UK, a sensitivity analysis is performed to test how input parameters influence the model output. Sensitivity analysis results highlight that the NPV is considerably sensitive to FinEX and revenue parameters, as well as to some OPEX parameters, i.e. the mean time to failure of the wind turbine components and the workboat significant wave height limit. Application of the model from the perspective of investors with different entry and exit timings derives the temporal return profiles, revealing important insights regarding the potential minimum asking and maximum offered price.
Highlights
With 92 wind farms in operation across European countries (including sites with partial grid-connected offshore wind (OW) turbines [1]), the OW market and supply chain have been rapidly expanding, attracting a diverse pool of investors that include Utilities, Original Equipment Manufacturers (OEMs), Independent Power Producers, Japanese Trading Houses, Pension Funds and Banks [2]
This paper aims at addressing this challenge through developing a lifecycle techno-economic assessment framework for the prediction of lifecycle costs of OW farms, which incorporates up-to-date models for the estimation of key cost components, taking into consideration technical aspects associated with the installation and maintenance of the asset
It is indicated that the costs incurred during the Production and Acquisition (P&A) phase have the largest share of the total costs (46%), followed by the Operation and Maintenance (O&M) costs (30%)
Summary
With 92 wind farms in operation across European countries (including sites with partial grid-connected offshore wind (OW) turbines [1]), the OW market and supply chain have been rapidly expanding, attracting a diverse pool of investors that include Utilities, Original Equipment Manufacturers (OEMs), Independent Power Producers, Japanese Trading Houses, Pension Funds and Banks [2] Speaking, these investors can be segmented based on their attitude to risk (technology readiness level, track record, portfolio diversity, country, and asset phase), return expectations (Internal Rate of Return (IRR) and yield), holding length, and level of engagement [2,3].
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