Increasing the capacity factor of offshore wind farms and limiting operations and maintenance (O&M) requirements will be the "key" to future drops in offshore wind's levelised cost of electricity (LCOE), argues the International Renewable Energy Agency (Irena).
Existing offshore wind installed capacity in Europe has LCOEs ranging from US$0.15-0.23/ kWh, according to data published this week by Irena in its report Renewable Power Generation Costs in 2012. These are forecast to drop somewhat between now and the end of the decade.
Meanwhile, capital costs for offshore wind projects are cited as ranging from $4,000 to 4,500/kW, with the average price of an offshore turbine at $1,970.
Turbines currently account for 30-50% of an offshore project's capital costs, far less than for an onshore wind farm, according to the report. Other high-price elements in offshore wind capital outlay include construction (15-25%), grid connection (15-30%) and a bundle of issues that include permitting, development design and engineering, licensing, and monitoring (8-30%).
Renewable energy players are urged by the report authors to resist "static analysis" of the costs of various power generation technologies, as this risks leading to "spurious conclusions" about the most appropriate energy mix for a particular country or region. Using "dynamic system analysis" is a more effective way of optimising electricity network flexibility while maximising renewable generation.
Also announced this week is news that China will become a member of Irena. More than one hundred nations are now Irena members, which has its headquarters in Abu Dhabi.