Cost reductions for offshore wind power: Exploring the balance between scaling, learning and R&D
Offshore wind electricity generation is prospected to increase substantially in the near future at a number of locations, like in the Baltic, Irish and North Sea, and emerge at several others. The global growth of offshore wind technology is likely to be accompanied by reductions in wind park construction costs, both as a result of scaling and learning effects. Since 2005, however, significant cost increases have been observed. A recent surge in commodity prices proves to constitute one of the main drivers of these cost increases. This observation begs the question whether wind turbine manufacturers should return to the laboratory for undertaking R&D that explores the use of alternative materials and bring offshore wind energy closer to competitiveness. It is demonstrated that if one abstracts from material price fluctuations, in particular for metals such as copper and steel, turbine production plus installation cost data publicly available for a series of offshore wind park projects (realized in several European countries since the 1990’s) show a cost reduction trend. Hence various other sources of cost increases, such as due to the progressively larger distances from the shore (and correspondingly greater depths at sea) at which wind parks have been (and will be) built, are outshadowed by cost reduction effects. When one expresses the overall cost development for offshore wind energy capacity as an experience curve, a learning rate is found of 3%, which reflects a mixture of economies-of-scale and learning-by-doing mechanisms. Also the impact is quantified on offshore wind power construction costs from the recent tightness in the market for turbine manufacturing and installation services: without the demand-supply response inertia at the origin of this tightness it is estimated that the learning rate would be 5%. Since these learning rates are relatively low – in comparison to those observed for other technologies, and in view of the high current capacity costs of offshore wind in comparison to onshore wind energy – a renewed focus on learning-by-searching or R&D is recommended.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:41:y:2012:i:c:p:389-393. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.