A lifecycle techno-economic model of offshore wind energy for different entry and exit instances

Anastasia Ioannou, Andrew Angus, Feargal Brennan

Research output: Contribution to journalArticle

29 Citations (Scopus)
44 Downloads (Pure)

Abstract

The offshore wind (OW) industry has reached reasonable maturity over the past decade and the European market currently consists of a diverse pool of investors. Often equity investors buy and sell stakes at different phases of the asset service life with a view to maximize their return on investment. A detailed assessment of the investment returns taking into account the technical parameters of the problem, is pertinent towards understanding the value of new and operational wind farms. This paper develops a high fidelity lifecycle techno-economic model, bringing together the most up-to-date data and parametric equations from databases and literature. Subsequently, based on a realistic case study of an OW farm in the UK, a sensitivity analysis is performed to test how input parameters influence the model output. Sensitivity analysis results highlight that the NPV is considerably sensitive to FinEX and revenue parameters, as well as to some OPEX parameters, i.e. the mean time to failure of the wind turbine components and the workboat significant wave height limit. Application of the model from the perspective of investors with different entry and exit timings derives the temporal return profiles, revealing important insights regarding the potential minimum asking and maximum offered price.

Original languageEnglish
Pages (from-to)406-424
Number of pages19
JournalApplied Energy
Volume221
Early online date17 Apr 2018
DOIs
Publication statusPublished - 1 Jul 2018

Keywords

  • entry and exit timing
  • investor clusters
  • lifecycle
  • offshore wind
  • strategic investment decision support
  • techno-economic model

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