Deriving Current Cost Requirements from Future Targets: Case Studies for Emerging Offshore Renewable Energy Technologies

Abstract

This work investigates potential cost reduction trajectories of three emerging offshore renewable energy technologies (floating offshore wind, tidal stream, and wave) with respect to meeting ambitious cost targets set out in the Strategic Energy Technology Implementation Plans (SET-Plans) for Offshore Wind and Ocean Energy. A methodology is presented which calculates target costs for current early-stage devices, starting from the 2030 SET-Plan levelised cost targets. Component-based experience curves have been applied as part of the methodology, characterised through the comparative maturity level of each technology-specific cost centre. The resultant early-stage target costs are then compared with actual costs for current devices to highlight where further cost reduction is still required. It has been found that innovation and development requirements to reach these targets vary greatly between different technologies, based on their current level of technological maturity. Future funding calls and programmes should be designed with these variables in mind to support innovative developments in offshore renewables. The method presented in this paper has been applied to publicly available cost data for emerging renewable technologies and is fully adaptable to calculate the innovation requirements for specific early-stage renewable energy devices.

Optimal techno-enviro-economic analysis of a hybrid grid connected tidal-wind-hydrogen energy system

“…The corresponding floating tidal energy LCOE values evaluated for a life time of 25 years under the high and low-cost estimates are presented in Table 3. It is possible to notice that the evaluated tidal stream LCOEs are consistent with the literature estimates, mainly included in a wide range of 0.115 €/kWh-0.476 €/kWh [41], and at the same time are closed to the UK targets. The tidal stream energy LCOE target of the strategic energy technology implementation plans (SET-Plans) for tidal energy in the UK is 0.15 €/kWh and 0.1 €/kWh for the year 2025 and 2030, respectively [41].…”

“…It constitutes a capacity factor of about 34%. Shona et al [41] assess the typical discount rate for an offshore RES technologies to 12%, while according to A. Myhr et al [42], the floating offshore technologies can have a reduced discount rate of 10%, as the base case. Therefore, an O&M growth rate of 4% and a discount rate of 10% per year are considered here.…”

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

“…Many opinions assume that the sub-costs of CAPEX occur at time zero and that CAPEX does not need to discount for the present value. Thus, the LCOE only comprises the CAPEX without discount and OPEX with discount presented by Equation (11) [30,35,80,[86][87][88].…”

“…The lifespan affects the present net value of a project. The lifespan is usually set from 20 years [86,103,115] to 32 years [88]. The lifespan expresses the prospects of the project for the stakeholders.…”

Estimating Future Costs of Emerging Wave Energy Technologies

“…Developers can use this approach internally to inform their technical decisions, but the method lacks transparency where the cost estimation and the allocation of different levels of uncertainty to the detailed breakdown are concerned. A similar approach based on a reverse cost calculation was developed by Pennock [17] for emerging technologies. In this case, the current cost thresholds for early-stage devices are calculated in order to reach the 2030 SET-Plan levelised cost targets [6].…”