A Review of the Levelized Cost of Wave Energy Based on a Techno-Economic Model

Abstract

Wave energy provides a renewable and clear power for the future energy mix and fights against climate change. Currently, there are many different wave energy converters, but their costs of extracting wave energy are still much higher than other matured renewables. One of the best indicators of calculating the generating cost of wave energy is the ‘levelized cost of energy’ (LCOE), which is the combined capital expenditure (CAPEX), operational expenditure (OPEX), and decommissioning cost with the inclusion of the annual energy production, discount factor, and project’s lifespan. However, the results of the LCOE are in disagreement. Hence, it is important to explore the cost breakdown of wave energy by the wave energy converter (WEC), so for finding potential ways to decrease the cost, and finally compare it with other renewable energies. Different WECs have been installed in the same place; the Wave Dragon LCOE platform is the best one, with an energy conversion of EUR 316.90/MWh, followed by Pelamis with EUR 735.94/MWh and AquaBuOY with EUR 2967.85/MWh. Even when using different locations to test, the rank of the LCOE would remain unchanged with the different value. As the CAPEX and OPEX dramatically drop, the availability and capacity factors slowly increase, and the LCOE decreases from a maximum of USD 470/MWh to a minimum of USD 120/MWh. When the discount rate is down from 11% to 6%, the LCOE reduces from USD 160/MWh to USD 102/MWh. Under the ideal condition of the optimal combination of multiple factors, in theory, the LCOE can be less than USD 0.3/KWh. To better explore the LCOE for WECs, the detailed cost elements found in the CAPEX and OPEX have been examined for the scenarios of the undiscounted, half-discounted, and discounted cost models. When the AEP is discounted, the lowest LCOE is equal to USD 1.171/kWh in scene 2 when using a five-step investment, which is below the LCOE value of USD 1.211/kWh in scene 1 when using a two-step investment. Meanwhile, the highest LCOE amounts to USD 2.416/kWh using the five-step investment, whose value is below the LCOE of a two-step investment. When using a one-step investment in scene 3, the lowest LCOE is equal to USD 0.296/kWh, which accounts for 25% of the lowest value in the five-step investment. Meanwhile, the highest LCOE amounts to USD 0.616/kWh, which accounts for 24% of the highest value in the two-step investment. The results of the case study show that a one-step investment program in the half-discounted model is superior to the multi-step investment in the discounted model. This paper examines the viability of wave energy technologies, which is a critical factor for the LCOE of wave energy; furthermore, the form of investment in the wave energy project is also important when calculating the LCOE.

An Evaluation of Wave Energy Generation and Cost of Energy in the Black Sea

“…Thus, the amount of material used to manufacture the components of a WEC such as the float, mooring lines, and the body of the device should be estimated. Several cost breakdowns of wave energy converters as a ratio of either capital cost or the total costs are shown in Table 1 and are given in (Bosserelle et al, 2015;Guo et al, 2023;Piscopo et al, 2017;SI Ocean, 2013). Finally, all the steps of the analyses are visualized by a flowchart as seen in Figure 2.…”

Feasibility of Wave Energy Harvesting in the Ligurian Sea, Italy

“…These costs vary significantly among WECs depending on the assumptions and considerations made. One of them, for instance, is a wide range of r values, usually reported in the literature [50,65]. In addition, the feasibility of such projects is based on whether the payback period does does not exceed the viability limit, which is usually set at 20 years [25].…”

Floating Oscillating Water Column Wave Energy Converters: A Review of Developments

“…EU Joint Research Centre [12] estimated that the Levelized Cost of Energy (LCOE) for wave energy in 2019 ranged between 0.47 EUR/kWh and 1.4 EUR/kWh. Today (i.e., 2023), these values range between 0.3 EUR/kWh and 1.2 EUR/kWh [13]. Even if measured in different currencies, the wave energy LCOE sits in a range of 0.18-0.87 USD/kWh, whereas that of offshore wind varies from 0.1 to 0.56 USD/kWh, and solar energy varies from 0.06 to 0.38 USD/kWh.…”