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Development and Investment Costs of Offshore Wind Power

Offshore wind only accounts for a small amount of the total installed wind power capacity in the world – approximately 1 per cent. The development of offshore wind has mainly been in northern European counties, around the North Sea and the Baltic Sea, where about 20 projects have been implemented. At the end of 2007, almost 1 100 MW of capacity was located offshore. 2008 saw 366 MW of offshore wind capacity installed in the EU, taking the total installed capacity to 1 471 MW in nine Member States, compared to the five countries having operating wind farms in 2007.


Offshore wind power in Europe 2008

Source: EWEA


Figure 2.1: Development of Offshore Wind Power in the EU, 1998-2007

Figure 2.1: Development of offshore wind power in the EU 1998-2007, EWEA

Source: EWEA


Figure 2.2: Total Offshore Wind Power Installed by the End of 2007

Figure 2.2: Total offshore wind power installed by end 2007, EWEA

Source: EWEA

Five countries have operating offshore wind farms: Denmark, Ireland, The Netherlands, Sweden and the UK, as shown in Table 2.1. In 2007, the Swedish offshore wind farm, Lillgrunden, with a rated capacity of 110 MW was installed. Most of the capacity has been installed in relatively shallow waters (under 20m deep) no more than 20km from the coast, in order to minimise the extra costs of foundations and sea cables.

Table 2.1: Installed Offshore Capacity in Offshore Wind Countries.

Country MW installed in 2006 Accumulated MW, end 2006 MW installed in 2007 Accumulated MW, end 2007
Denmark 0 409 0 409
Ireland 0 25 0 25
The Netherlands 108 108 0 108
Sweden 0 23 110 133
UK 90 304 100 404
Total global 198 869 210 1079

Source: EWEA

Offshore wind is still around 50 per cent more expensive than onshore wind. However, due to the expected benefits of more wind and the lower visual impact of the larger turbines, several countries now have very ambitious goals concerning offshore wind.

The total capacity is still limited, but growth rates are high. Offshore wind farms are installed in large units - often 100-200 MW - and two new installed wind farms per year will result in future growth rates of between 20 and 40 per cent. Presently, higher costs and temporary capacity problems in the manufacturing stages, as well as in the availability of installation vessels, cause some delays, but even so, several projects in the UK and Denmark will be finished within the next three years, as seen in Tables 2.2-2.6.

Table 2.2: Operating and Planned Offshore Wind Farms in the UK.

Project Location Region Capacity Nr of turbines Water Depth Distance To Shore Online
In operation              
Barrow 7km WalneyIsland Off  England 90 30 >15 7km 2006
Beatrice Beatrice Oilfield,Moray Firth Off Scotland 10 2 >40 unknown 2007
Blyth Offshore 1km BlythHarbour Off England 3,8 2 6 1km 2000
Burbo Bank 5.2km Crosby Off England 90 25 10 5.2km 2007
Kentish Flats 8.5 km offshore from Whitstable Off England 90 30 5 8.5km 2005
North Hoyle 7.5km Prestatyn & Rhyl Off Wales/England 60 30 5 to 12 7.5km 2003
Scroby Sands 3km NE GreatYarmouth Off England 60 30 2 to 10 3km 2004
Under Construction              
Inner Dowsing 5.2km Ingoldmells Off England 90 27 10 5.2km n.c.
Lynn 5.2km Skegness Off England 97 30   5.2km n.c.
Ryhl Flats 8km Abergele Off Wales 90 25 8 8km n.c.
Solway Firth/Robin Rigg A 9.5km Maryport/8.5km off Rock Cliffe Off England/Scotland 90 30 >5 9.5km n.c.
Solway Firth/Robin Rigg B 9.5km Maryport/8.5km off Rock Cliffe Off England/Scotland 90 30 >5 9.5km n.c.

Source: EWEA

Table 2.3: Operating and Planned Offshore Wind Farms in The Netherlands

Project Location Capacity Nr of turbines Water Depth Distance To Shore Online
In operation            
Offshore Wind Farm Egmond aan Zee (OWEZ)  Egmond aan Zee 108 36 17-23 m 8 - 12 km 2006
Lely* Medemblik, Ijsselmeer (inland lake) 2 4 7.5 0.75 1994
Irene Vorrink (Dronten)* Dronten, Ijsselmeer (inland freshwater lake), to the outside of the dyke 16,8 28 2 0.03 1996
Princess Amalia Ijmuiden 120 60 19 - 24 m > 23 km 2008

Source: EWEA

Table 2.4: Operating and Planned Offshore Wind Farms in Denmark

Project Location Capacity Number
of turbines
Water Depth Distance To Shore Online
Vindeby Blæsenborg Odde, NW off Vindeby, Lolland 4,95 11 2.5 to 5 2.5 1991
Tunø Knob off Aarhus, Kattegat Sea 5 10 0.8 to 4 6 1995
Middelgrunden Oresund, east of Copenhagen harbour 40 20 5 to 10 2 to 3 2001
Horns Rev Blåvandshuk, Baltic Sea 160 80 6 to 14 14-20 2002
Nysted Havmøllepark Rødsand, Lolland 165,6 72 6 to 9 6 2003
Samsø Paludans Flak, South of Samsø 23 4 11 to 18 3,5 2003
Frederikshavn£ Frederikshavn Harbour 10,6   3 0.8 2003
Rønland* Lim fjord, off Rønland peninsula, in the Nissum Bredning , off NW Jutland 17,2 8 3   2003
* near shore projects   409,15        
Horns Rev II Blåvandshuk, Baltic Sea (10km west of Horns Rev) 200 10 to 18 n.c. 17 2009
Nysted Havmøllepark II 9km off Rødsand, Lolland in the Baltic Sea 200 6 to 9 n.c. 10 2010

Source: EWEA

Table 2. 5: Operating and Planned Offshore Wind Farms in Sweden

Project Location Capacity Number
Water Depth Distance To Shore Online
Bockstigen Gotland 2,8 5 6 - 8 m 3 km 1998
Utgrunden I Kalmarsund 10,5 7 4 - 10 m 7 km 2001
Yttre Stengrund Kalmarsund 10,0 5 8 - 12 m 4 km 2002
Lillgrund Malmö 110,0 48 2,5 - 9 m 10 km 2007
Under construction            
Gässlingegrund Vänern 30 10 4-10 m 4 km 2009

Source: EWEA

Table 2.6: Operating and Planned Offshore Wind Farms in Ireland

Project Location Capacity Number
Water Depth Distance To Shore Online
Arklow Bank off Arklow, Co Wicklow 25.2 7 15 7 2004

Source: EWEA

Offshore costs depend largely on weather and wave conditions, water depth and distance from the coast. The most detailed cost information on recent offshore installations comes from the UK, where 90 MW in 2006 and 100 MW in 2007 were added, and from Sweden with the installation of Lillgrunden in 2007.

Table 2.7 gives information on some of the recently established offshore wind farms. As shown, the chosen turbine size for offshore wind farms ranges from 2 to 3.6 MW, with the newer wind farms being equipped with the larger turbines. The size of the wind farms also vary substantially, from the fairly small Samsø wind farm of 23 MW, to Robin Rigg, the world’s largest offshore wind farm, with a rated capacity of 180 MW. Investment costs per MW range from a low of 1.2 million €/MW (Middelgrunden) to 2.7 million €/MW (Robin Rigg) - see Figure 2.3.

Table 2.7: Key Information on Recent Offshore Wind Farms

  In operation Number
of turbines
Turbine size Capacity MW Investment costs
€ million
Middelgrunden (DK) 2001 20 2 40 47
Horns Rev I (DK) 2002 80 2 160 272
Samsø (DK) 2003 10 2.3 23 30
North Hoyle (UK) 2003 30 2 60 121
Nysted (DK) 2004 72 2.3 165 248
Scroby Sands (UK) 2004 30 2 60 121
Kentich Flats (UK) 2005 30 3 90 159
Barrows (UK) 2006 30 3 90 -
Burbo Bank (UK) 2007 24 3.6 90 181
Lillgrunden (S) 2007 48 2.3 110 197
Robin Rigg (UK) 2008 60 3 180 492

Note: Robin Rigg is planned to be in operation in 2008

Source: Risø DTU

The higher offshore capital costs are due to the larger structures and complex logistics of installing the towers. The costs of offshore foundations, construction, installations and grid connection are significantly higher than for onshore. For example, offshore turbines are generally 20  per cent more expensive and towers and foundations cost more than 2.5 times the price of those for a similar onshore project.


Figure 2.3: Investments in Offshore Wind Farms, Million €/MW (Current Prices)

Figure 2.3: Investments in offshore wind farms, million €/MW (Current prices), source: Risoe

Source: Risø DTU

In general, the costs of offshore capacity have increased in recent years, as is the case for land-based turbines, and these increases are only partly reflected in the costs shown in Figure 2.3. As a result, the average costs of future offshore farms are expected to be higher. On average, investment costs for a new offshore wind farm are expected be in the range of 2.0 to 2.2 million €/MW for a near-shore, shallow-water facility.

To illustrate the economics of offshore wind turbines in more detail, the two largest Danish offshore wind farms can be taken as examples. The Horns Rev project, located approximately 15 km off the west coast of Jutland (west of Esbjerg), was finished in 2002. It is equipped with 80 machines of 2 MW, with a total capacity of 160 MW. The Nysted offshore wind farm is located south of the isle of Lolland. It consists of 72 turbines of 2.3 MW and has a total capacity of 165 MW. Both wind farms have their own on-site transformer stations, which are connected to the high voltage grid at the coast via transmission cables. The farms are operated from onshore control stations, so staff are not required at the sites. The average investment costs related to these two farms are shown in Table 2.8

Table 2.8: Average Investment Costs per MW Related to Offshore Wind Farms in Horns Rev and Nysted

  Investments 1000 €/MW Share (per cent)
Turbines ex works, including transport and erection 815 49
Transformer station and main cable to coast 270 16
Internal grid between turbines 85 5
Foundations 350 21
Design and project management 100 6
Environmental analysis 50 3
Miscellaneous 10 <1
Total 1,680 ~100

Note: Exchange rate EUR1 = DKK7.45

Source: Risø DTU

In Denmark, all of the cost components above are covered by the investors, except for the costs of the transformer station and the main transmission cable to the coast, which are covered by TSOs in the respective areas. The total costs of each of the two offshore farms are around €260 million.

In comparison to land-based turbines, the main differences in the cost structure are related to two issues:

  1. Foundations are considerably more expensive for offshore turbines. The costs depend on both the sea depth and the type of foundation being built (at Horns Rev monopiles were used, while the turbines at Nysted are erected on concrete gravity foundations). For a conventional turbine situated on land, the foundations’ share of the total cost is normally around 5-9 per cent, while the average of the two projects mentioned above is 21 per cent (see Table 2.8), and thus considerably more expensive. However, since considerable experience will be gained through these two wind farms, a further optimisation of foundations can be expected in future projects.
  2. Transformer stations and sea transmission cables increase costs. Connections between turbines and the centrally located transformer station, and from there to the coast, generate additional costs. For the Horns Rev and Nysted wind farms, the average cost share for the transformer station and sea transmission cables is 21 per cent (see Table 2.8), of which a small proportion (5 per cent) goes on the internal grid between turbines.

Finally, a number of environmental analyses, including an environmental impact investigation (EIA) and graphic visualising of the wind farms, as well as additional research and development were carried out. The average cost share for these analyses accounts for approximately 6 per cent of total costs, but part of these costs are related to the pilot character of these projects and are not expected to be repeated for future offshore wind farm installations.

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