As the second scenario envisages rapid development of the wind industry, it assumes 8MW turbines are installed from 2020, with rotor diameters of 178 metres by 2023. Wind farms are envisaged to have a rated output of 450MW and to move further offshore - up to 120 kilometres - and into progressively deeper waters of 30 to 50 metres. Wind speeds also increase from lowest 9.9m/s nearshore (site A) to highest 10.1m/s farshore (site C).
The most expensive wind farm in 2017 (lower growth scenario, far from shore) costs EUR 4,062/kW, projected to fall to EUR 3,590/kW by 2023. The data suggests that the benefits of accessing the higher wind speeds further offshore do not outweigh the higher installed costs. In 2023, under scenario 1 electricity from wind farms close to shore is projected to cost EUR 91/MWh, and EUR 100/MWh from a far-from-shore site. The study assumes that the weighted average cost of capital will decline from 7.85% in 2013 to 5.68% in 2023. Increasing confidence in the industry is also reflected in a reduction of the contingency allowance, from 15% in 2017 to 10% in 2023.
This contingency accounts for a significant proportion of the total cost, as seen in the cost breakdown for a near-shore site in 2017. Wind turbines account for the highest proportion (32%), followed by support structures (21%).
The Fichtner study does not anticipate a significant drop in wind turbines costs - in contrast to the UK Crown Estate's Offshore Wind Cost Reduction Pathways Study of 2012. Apart from this, the overall conclusions of the two studies are similar, once the higher cost of capital (9%) in the UK study is considered. This pushed up the cost of energy by about EUR 20/MWh, compared with the Fichtner study.
US comparison
Data from the US Department of Energy's (DOE) Annual Energy Outlook 2014 on likely installed costs was recently published on an energy information-sharing website. The trajectory runs to 2040, by which time installed costs are expected to be around EUR 3,640/kW for US offshore sites. This is roughly the same as for the most expensive scenario in the German report for 2023. The DOE has gradually increased its estimate of offshore wind costs in recent years and the latest estimate is some 26% higher than its 2013 estimate. The level of detail in the latest projections suggests this is the result of further analysis.
The starting point - in 2017 - is EUR 4,718/kW, around 12% higher than the equivalent German estimate, which may well be through factoring in a higher contingency for what is a new technology (in the US), combined with the higher costs associated with deep water sites.
This month's report conclusions:
Fichtner and Prognos Cost Reduction Potentials of Offshore Wind Power in Germany By 2023, following moderate offshore wind growth, electricity from wind farms close to shore will cost EUR 91/MWh, and EUR 100/MWh from a far from shore site.
Comparison with DOE Annual Energy Outlook 2014 In 2017, US offshore installed costs will be EUR 4,718/kW. This is about 12% higher than the corresponding German estimate of about EUR 4,200/kW. By 2040 US costs may be about EUR 3,640/kW.
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