This report uses representative commerical project types to estimate the levelized cost of energy (LCOE) for both land-based and offshore wind plants in the United States (U.S.) for 2013. Scheduled to be published on an annual basis, it relies on both market and modeled data to maintain an up-to-date understanding of wind generation cost trends and drivers. It is intended to provide insight into current component-level costs and a basis for understanding variability in the LCOE across the industry. Data and tools developed from this analysis are used to inform wind technology cost projections, goals, and improvement opportunities.The primary elements of the 2013 report include:• Estimated LCOE for a reference land-based wind project installed in the interior region of the U.S. in 2013• Estimated cost of energy for a reference fixed-bottom U.S. offshore wind project reflecting projects currently in late-stage development on the North Atlantic Coast• Sensitivity analyses showing the range of effects that basic LCOE variables could have on the cost of wind energy for land-based and offshore wind power plants• Historical trends in the LCOE for land-based and offshore wind plants.The LCOE equation applied here is a standard methodology (Short et al. 1995, EPRI 2007) that includes four basic inputs: capital expenditures, operational expenditures, annual energy production, and the fixed charge rate (a coefficient that captures the cost of financing the construction of a wind project and the entirety of the planned plant's operational life). Additional detail on the LCOE can be found in the 2010 Cost of Wind Energy Review (Tegen et al. 2012).The LCOE values reported within the reviews are expected to be greater than negotiated contract prices for wind power, as reflected by recent power purchase agreements. This increase is because recent power purchase agreements incorporate the value of the production tax credit (PTC), accelerated depreciation, other Renewable Energy Credits, or other applicable revenue streams.

Electrical Interface/Connections Electrical interface covers the turbine transformer and the individual turbine's share of cables to the substation. These data originally came from the WindPACT balance-of-station study (Shafer 2001) and were used in this model as originally derived. Electrical interface/connection cost factor ($/kW) = 3.49E-6 * machine rating 2-0.0221 * machine rating + 109.7 Electrical interface/connection cost = machine rating * electrical cost factor above Engineering, Permits Engineering and permits covers the cost of designing and permitting the entire wind facility, allocated on a turbine-by-turbine basis. These costs are highly dependent upon the location, environmental conditions, availability of electrical grid access, and local permitting requirements. The formulas provided here were first derived from the WindPACT balance-ofstation cost study (Shafer 2001) and were used in this model without modification. Engineering, permits cost factor ($/kW) = 9.94E-4 * machine rating + 20.31 Engineering, permits cost = machine rating * engineering, permits cost factor above Land Lease Costs Wind turbines normally pay lease fees for land used for wind farm development. This cost is principally based on the land used by the turbine. The factors applied in different wind farm developments vary widely depending on the wind class of the particular site, the nature and value of the land, and the potential market price for the wind. No single number or model is currently available to predict these costs based on turbine rating, size, or wind class. The number used in this model is based on a cost per kilowatt-hour of production making it highly variable with wind class and machine performance. This cost was proposed for the LWST Project and defined in the report on pathways analysis (Malcolm 2006

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Executive SummaryThis report is intended to provide offshore wind industry stakeholders a basis for evaluating potential cost saving installation, operation, and maintenance (IO&M) strategies and technologies. Some of the IO&M strategies in this report were analyzed without projecting the capital expenditures associated with an enabling technology or method. Thus, the results show the upside or added value to a strategy (e.g. increased energy production), and not the potential downside (e.g. added capital cost of new hardware). The results of the analysis can therefore be used by industry stakeholders to take the cost savings presented in this report and add their revised technologies costs to arrive at a net decrease or increase in cost of energy resulting from a proposed IO&M strategy. This allows many technologies that target the same improvement area to be evaluated subsequent to this study. To clarify this concept, an example is presented below.Company X is interested in bringing an innovative vessel capable of operating at higher wind and wave conditions to market. If a strategy using an innovative vessel capable of operating in higher wind and wave conditions (similar to Company X's design) is shown to reduce costs by $100/kW with respect to the baseline, Company X can see that in order to be viable in the market, they must be able to deliver their innovative vessel at a rate no more than $100/kW greater than the vessel rate used in the baseline. If Company X can deliver their innovative vessel at $25/kW more than the baseline, they will have demonstrated that their new vessel technology is capable of saving $75/kW with respect to the baseline. IntroductionIO&M is expected to account for nearly one-third of offshore wind levelized cost of energy (LCOE) in the United States (U.S. Department of Energy, 2011). Consequently, there is a large potential for reducing LCOE through advanced IO&M strategies. NREL and ECN, along with a panel of subject matter experts who provided input, have used their offshore wind cost modeling capabilities to fulfill the project's two primary objectives:• Conduct analysis and modeling to identify the most practical means of reducing offshore wind LCOE through advanced IO&M techniques, integrated service providers, and preferred supporting infrastructure.• Identify preferred IO&M strategies in a case study of a hypothetical U.S. offshore wind project. viThis report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications.To accomplish the objectives related to installation costs, NREL has developed a new offshore wind turbine installation cost module which, coupled with the NREL offshore wind plant balance of station (BOS) model, is capable of analyzing many scenarios including the six (6) turbine assembly strategies and three (3) additional project installation strategies that this study analyzes.To accomplish the objectives related to O&M costs, ECN has established an O&M tool for the U.S. offshore market based on their industry-l...

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