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Chapter 2: Offshore developments

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%. 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 1100 MW of capacity was located offshore.

 

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

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

Five countries have operating offshore wind farms: Denmark, Ireland, the Netherlands, Sweden and the UK, as shown in Table 3. 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 20 km 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. Source: EWEA

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
The United Kingdom	90	304	100	404
Total global	198	869	210	1079

Offshore wind is still around 50% 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 20-40%. 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 from the tables below.

Table 2.2: Operating and planned offshore wind farms in the UK. Source: EWEA

In operation
Project	Location	Region	Capacity	Nr of turbines	Water Depth	Distance To Shore	Online
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
			403,8
Under Construction
Project	Location	Region	Capacity	Nr of turbines	Water Depth	Distance To Shore	Online
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.

Table 2.3.: Operating and planned offshore wind farms in the The Netherlands, EWEA

In operation
Project	Location	Capacity	Nr of turbines	Water Depth	Distance To Shore	Online
Offshore Wind Farm Egmond aan Zee (OWEZ)	Egmond aan Zee	108	36	17-23 m	8 to 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

Table 2.4: Operating and planned offshore wind farms in the Denmark, EWEA

Operation
Project	Location	Capacity	Nr 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
Construction
Project	Location	Capacity	Nrof turbines	Water Depth	Distance To Shore	Online
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

Table 2. 5: Operating and planned offshore wind farms in the Sweden, EWEA

Operational
Project	Location	Capacity	Nr of turbines	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
		133,25
Under construction
Project	Location	Capacity	Nr of turbines	Water Depth	Distance To Shore	Online
Gässlingegrund	Vänern	30	10	4-10 m	4 km	2009

Table 2.6: Operating and planned offshore wind farms in Ireland, EWEA

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

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 were added in 2006 and 100 MW in 2007; 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 with a rated capacity of 180 MW, the world’s largest offshore wind farm. 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. (Note that Robin Rigg is planned to be in operation in 2008), source: Risoe

	In operation	Number of turbines	Turbine size	Capacity MW	Invest-ment 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

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% more expensive and towers and foundations cost more than 2.5 times the price of a similar onshore project.

 

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

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, through 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. Source: Risoe

	Investments 1000 €/MW	Share %
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	1680	~100

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:

• 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%. As an average of the two projects mentioned above, this percentage is 21% (see Table 2.8), and thus considerably more expensive than for onshore sites. However, since considerable experience will be gained through these two wind farms, a further optimisation of foundations can be expected in future projects.
• 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 Horns Rev and Nysted wind farms, the average cost share for the transformer station and sea transmission cables is 21% (see Table 2.8), of which a small proportion (5%) 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% 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.