Floating offshore wind energy in Portugal: What is at stake?

Renewable energy has become increasingly cost-competitive and compliance with the Paris Agreement foresees significant investments in renewable energy sources in the coming decades. Floating offshore wind has emerged as a promising technology capable of exploiting superior wind resources in deeper waters, accounting for a substantial share of offshore wind potential. Although the technology remained at an early stage of development with limited installed capacity, its significant global project pipeline and expected technological progress signalled commercial viability. This paper developed an economic model to evaluate floating offshore wind deployment under a competitive auction scheme. The model is applied to a 506 MW project located off the coast of Viana do Castelo, Portugal. The results reveal a levelized cost of electricity of €92.58/MWh, which is aligned with recent European auction outcomes. Capital expenditures dominate total costs, and the estimated 22.4-year payback period underscored the long-term nature of these investments, which are particularly sensitive to discount rates, reinforcing the importance of de-risking mechanisms and long-term policies. Project lifetime, learning rate, turbine power rating, installed capacity, and capacity factor demonstrated dynamics suggest providing support to the expansion of floating offshore wind as the technology matures.