A Spatial-Economic Cost-Reduction Pathway Analysis for U.S. Offshore Wind Energy Development from 2015–2030

Abstract

After a decade of rising costs and technical challenges, project financial data indicates that offshore wind may finally be on a downward cost trajectory while the industry logged its best deployment year ever in 2015. Historically, rising offshore wind costs have been attributed to a myriad of hindrances, including increasing siting challenges (e.g., deeper water, greater distances from shore) and a wide range of installation and operational difficulties that have frustrated developers and offset gains made in technology, learning, and experience. The resilience of the European offshore wind industry to overcome these daunting cost challenges can be attributed to stable European policy commitments, the introduction of new offshore-class turbine and substructure technologies, and the creation of an offshore wind industry supply chain.

The global climate value of offshore wind energy

“…For each region, we sort the LCOE from lowest to highest to form a supply curve (see panel (c) of figure S1). The estimated LCOE values for 2015 range from $0.12-0.18/kWh, in line with LCOE estimates from [4]. Once the energy and cost of each area is calculated and stacked to form a rough supply curve, then a smooth curve is fitted to the data following the equation used in GCAM for onshore wind [34] (more detail in S2 of the SM).…”

“…We developed offshore wind energy supply curves for each of GCAM's global regions plus coastal and Great Lakes states in the US (with the exceptions of Central Asia, FL, AL, and MS) 4 . The supply curves account for cost variations related to pursuing additional projects that may be further from the grid, in areas with lower quality wind resources, and in deeper water.…”

“…Using the global areas from [37] and the US areas from [38], we estimate the annual energy production of each area from its average wind speed assuming a Weibull distribution of annual wind speeds [see 37, 39, 47 for discussion] and a capacity density of 5 MW km −2 [4,[37][38][39]. We use the water depth and distance from shore to determine the appropriate capital cost and operation and maintenance (O&M) cost for each area [41,42].…”

“…(1) the base cost in 2015 is either high or low and (2) the rate of technological change is either the same as onshore wind or higher such that costs decline steeply until 2030, based on estimates from the literature [3,4] (see figure 1 and section S3 of the SM). The cases where the base costs begin high or low are abbreviated HC and LC, respectively, and we append AT (advanced technology) for cases where the costs decline rapidly.…”

“…Offshore wind energy is an emerging industry that has the potential to provide large amounts of electricity near load centers where land is scarce [1]. Costs have been dropping in recent years [2] and are expected to continue falling [3][4][5]. Offshore wind has the potential to play an important role in reducing greenhouse gas emissions by replacing or displacing fossil fuels; and can complement other variable renewable sources, especially solar, by providing complementary temporal generation profiles.…”