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Techno-economic assessment of wave energy converters arranged on an octagonal platform using multiple financial parameters

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  • Chen, Bangqi
  • Luan, Zhengxiao
  • He, Guanghua
  • He, Runhua
  • Liu, Chaogang

Abstract

To address the limitations of levelized cost of energy (LCOE), this study proposes a modified and emerging cost-financial model tailored specifically for wave energy projects. The model incorporates an improved Weighted Average Cost of Capital (WACC) as the discount rate and accounts for uncertainties in key inputs: capacity factor, income tax rate (Rtax), value-added tax (VAT) rate, feed-in tariff (FIT), expected return, A Modified LCOE (MLCOE) is applied to evaluate CorPower and OPWEC project, Results align well with existing literature, validating the reliability of the MLCOE approach. Notably, the MLCOE of the OPWEC project (¥3.36/kWh) is significantly higher than its conventional LCOE (¥3.03/kWh) Moreover, correlation analysis reveals a moderate relationship between discount rate and MLCOE (0.3548), with capacity factor identified as the primary uncertainty driver. Mean changes in income tax rate require particular attention, whereas distribution types of other variables have minimal impact. Sensitivity analysis further quantifies significant influences from capacity factor (−0.808), discount rate (0.3561), and stochastic inflation rate, alongside weaker effects from Rtax (−0.2413) and FIT (0.191). This research provides critical insights for policy optimization and actionable directions to enhance MLCOE competitiveness in wave energy technologies, emphasizing the need to prioritize capacity factor improvements and tax incentives.

Suggested Citation

  • Chen, Bangqi & Luan, Zhengxiao & He, Guanghua & He, Runhua & Liu, Chaogang, 2026. "Techno-economic assessment of wave energy converters arranged on an octagonal platform using multiple financial parameters," Renewable Energy, Elsevier, vol. 256(PA).
    • Handle: RePEc:eee:renene:v:256:y:2026:i:pa:s0960148125015708
    DOI: 10.1016/j.renene.2025.123906
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