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  

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    
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PREFACE
This thesis is carried out to conclude our Master of Science - Industrial Economics degree
programme at the Department of Mathematical Sciences and Technology at the Norwegian
University of Life Sciences. The thesis is interdisciplinary, and is predominantly based on
knowledge and understanding gained through our time at the university. The involved work
has been carried out through close cooperation between Catho Bjerkseter and Anders
Ågotnes, and represents an extent of 60 credits, corresponding to 1 800 working hours.

The main purpose of the thesis is to evaluate and compare Life Cycle Costs and Levelised
Costs of Energy for a series of fictitious wind farms consisting of wind turbines of different
conceptual or realised designs, located far offshore. The background for the thesis is the
development of two wind turbine substructure concepts, denominated TLB B and TLB X3,
developed in close cooperation between the Norwegian University of Life Sciences and the
Norwegian Institute of Energy Technology. The thesis illuminates important costs related to
development, construction, operation and disengagement of commercial-scale offshore wind
farms. Offshore wind energy is an exciting area of many unanswered problems, especially
with regards to floating technologies, and this thesis is written with hopes of illuminating key
aspects, and perhaps contribute to further industry development.

We gratefully acknowledge the support and assistance received from a number of individuals
and companies. We would especially like to thank Marte Aaberg Midtsund and Carl
Sixtensson (DNV Kema), Dieter Rabaut (DEME), Sigrid Ramuz Bomann-Larsen (Fearnley
Offshore Supply), Eirik Byklum (Statoil), Kolbjørn Moldskred (Ulstein Design & Solutions),
Steinar Ekrem (Viking SeaTech), Petter Heyerdahl (UMB), SWAY AS and Vryhof Anchors.
A special gratitude goes to René van de Pieterman and his colleagues at the Energy Research
Centre of the Netherlands, for letting us use their specialised Operation and Maintenance cost
estimator software, and continued support in the process.

Our thesis advisors, Professor Tor Anders Nygaard and Ph.D. candidate Anders Myhr,
deserve a special acknowledgment for their guidance and support through the thesis process.

Last, but not least, we wish to thank family and friends, in particular Hilde Raknes Hellberg
and Marianne Foldøy Byberg, for their continued support throughout our time at the
Norwegian University of Life Sciences.

Ås, May 15. 2013

____________________ ____________________

Catho Bjerkseter Anders Ågotnes

I
ABSTRACT
This master thesis is a part of the development of the floating TLB B and TLB X3 wind
turbine concepts, developed by the Norwegian University of Life Sciences and the Norwegian
Institute for Energy Technology. The thesis focuses on all costs occurring through different
life cycle phases of a wind farm, from wind farm development, production, acquisition and
installation of components, operation and maintenance of the wind farm, and finally wind
farm disengagement and decommissioning. All costs are found within expected cost ranges.
Total costs are discounted to values at equal points of time, and assigned to expected wind
farm energy production, to find costs per produced unit of energy, so-called Levelised costs of
energy. To evaluate the economic viability of the TLB concepts, the concepts are compared to
floating and bottom-fixed concepts, presented in section 2.1. These concepts are chosen for
comparisons due to their level of development, as all concepts are realised either through pilot
projects or on a commercial scale. Additionally, these concepts are associated with relatively
high levels of available and reliable data.

Total life cycle cost analyses are differentiated into five distinct phases:
1. Development and Consenting Costs: All costs associated with wind farm development,
estimated based on generic sources. Comparable concepts are not assigned differentiated
costs.
2. Production and Acquisition Costs: All costs associated with production and acquisition
of key wind farm components, such as turbines, substructures, mooring systems and all
electrical components. Cost estimations are based partly on generic sources, partly on
industry sources and partly on assumptions relative to known reference values. Concepts
are assigned differentiated values with respect to all cost categories except electrical
components, and the main differences between concepts are illuminated in this phase.
3. Installation Costs: All costs associated with installation of wind turbines, mooring
systems and electrical components. Cost estimations are based on generic sources and
industry sources for bottom-fixed concepts, used as reference bases for floating concept
assumptions and estimations due to lack of available data. Concepts are differentiated,
but cost differences are not realised to the same extent as for production and acquisition
costs. Installation processes are based on conventional installation methods.
4. Operation and Maintenance Costs: All costs associated with operating and maintaining
wind farms. Costs are simulated using specialised software, and are only differentiated
between floating and bottom-fixed concepts.
5. Decommissioning Costs: All costs associated with disengagement of the wind farms,
through reverse installation operations and revenue from scrapping of components. Cost
estimations are based on concept-specific installation costs and scrap potential.

Life cycle costs are discounted into levelised costs of energy, before sensitivities to changes
in key cost drivers are presented.

Preliminary analyses indicate the TLB B concept to be the favourable floating solution,
although concept energy costs are highly sensitive to water depths. The TLB B concept seems
to be directly competitive to bottom-fixed monopile concepts.

II
CONTENTS
1. Introduction ....................................................................................................................1
1.1 Background ..............................................................................................................1
1.1.1 Wind Power Introduction ..................................................................................1
1.1.2 European Plan on Climate Change and Offshore Wind Potential .......................4
1.1.3 Energy Costs and Support Mechanisms for Renewable Energy .........................6
1.1.4 Wind Turbine Description ............................................................................... 11
1.2 Problem Definition ................................................................................................. 15
1.3 Goals and Limitations ............................................................................................. 15
1.3.1 Main Goals ......................................................................................................15
1.3.2 Partial Goals .................................................................................................... 15
1.3.3 Assumptions, Limitations and Simplifications ................................................. 15
1.4 Employed Terminology .......................................................................................... 18
1.5 Methodology ..........................................................................................................23
1.5.1 Life Cycle Cost Analysis ................................................................................. 23
1.5.2 Levelised Cost of Energy ................................................................................ 24
1.5.3 Economical Evaluations .................................................................................. 25
1.5.4 Specialised Software ....................................................................................... 27
2. Underlying Conditions .................................................................................................. 28
2.1 Competing Wind Turbine Concepts ........................................................................ 28
2.1.1 TLB B and TLB X3......................................................................................... 29
2.1.2 Hywind ...........................................................................................................31
2.1.3 WindFloat ....................................................................................................... 32
2.1.4 SWAY ............................................................................................................ 33
2.1.5 Floating Concept Summary .............................................................................34
2.1.6 Bottom-fixed References ................................................................................. 35
2.2 Common Conditions ............................................................................................... 36
2.2.1 Wind Farm Definition ..................................................................................... 36
2.2.2 Turbine Definition ........................................................................................... 38
2.2.3 Energy Production ........................................................................................... 39
2.2.4 Scope and Viewpoint Definition ......................................................................44
2.3 Other Conditions .................................................................................................... 46
2.3.1 Commodity and Personnel Costs ..................................................................... 46

III
 2.3.2 Vessel Information .......................................................................................... 48
3. Life Cycle Cost Analyses .............................................................................................. 55
3.1 Development and Consenting ................................................................................. 56
3.2 Production and Acquisition .................................................................................... 61
3.2.1 Turbine Costs .................................................................................................. 61
3.2.2 Substructure and Tower Costs ......................................................................... 63
3.2.3 Mooring System .............................................................................................. 68
3.2.4 Grid Connection .............................................................................................. 77
3.3 Installation and Commissioning .............................................................................. 83
3.3.1 Substructure and Turbine Installation Method Overview ................................. 83
3.3.2 Installation of Bottom-fixed Concepts ............................................................. 86
3.3.3 Installation of Floating Concepts ..................................................................... 88
3.3.4 Installation of Mooring System........................................................................ 95
3.3.5 Installation of Electrical Infrastructure ............................................................. 99
3.4 Operation and Maintenance .................................................................................. 101
3.4.1 Maintenance .................................................................................................. 101
3.4.2 Operation and Maintenance Modelling .......................................................... 105
3.4.3 Operation and Maintenance Costs ................................................................. 111
3.5 Decommissioning ................................................................................................. 116
4. Levelised Cost of Energy Analyses ............................................................................. 119
4.1 Capital Expenditures ............................................................................................ 119
4.2 Operational Expenditures ..................................................................................... 121
4.3 Decommissioning Expenditures............................................................................ 121
4.4 Levelised Cost of Energy Results ......................................................................... 122
4.4.1 Levelised Cost of Energy Model Verification ................................................ 125
4.4.2 Onshore References ....................................................................................... 126
5. Sensitivity Analyses .................................................................................................... 128
5.1 Farm Size ............................................................................................................. 128
5.2 Offshore Distance ................................................................................................. 130
5.3 Water Depth ......................................................................................................... 131
5.4 Project Life Span .................................................................................................. 134
5.5 Optimisation of Farm Qualities ............................................................................. 135
5.6 Quantified Key Cost Drivers ................................................................................ 137

IV
6. Conclusion.................................................................................................................. 150
6.1 Evaluation ............................................................................................................ 150
6.2 Further Work ........................................................................................................ 151
7. Literature References .................................................................................................. 152
8. Appendix .................................................................................................................... 162
8.1 Written Appendices .............................................................................................. 162
8.2 Digital Appendices ............................................................................................... 162

Figure 1: Hywind, the world's first megawatt scaled floating wind turbine (Refsdahl 2011)

V
 1. INTRODUCTION
The main purpose of this section is to declare the goals of the thesis, as well as certain
limitations and simplifications set. Additionally, background information relevant to
harvesting of wind energy is presented.

1.1 Background
This section is intended as a superficial background introduction to offshore wind energy
through history, present situation and potential, as well as an overview of energy costs and
wind power technology.

1.1.1 Wind Power Introduction

The kinetic energy of the wind has been harvested by man for thousands of years, with sail-
driven boats on the river Nile in Egypt as early as 5000 B.C. as one of the earliest known
examples. By 200 B.C., wind energy was used to pump water and grind grain in China and
the Middle East, hence the commonly used denomination wind mills. By the 11th century
these technologies spread to Europe, where they particularly established a foothold in the
lowlands of the Netherlands and Denmark. (U.S. Department of Energy 2013)
After improving wind mill design and technology over centuries, the first electricity
producing wind turbine was developed by Scottish professor James Blythe in 1887, and by
the next year, American inventor Charles Brush produced the first large-scale electricity
producing wind turbine. The first megawatt-sized turbine was connected to a local, American
grid in the early 1940s, and increasing oil prices and raised awareness of renewable energy
benefits acted as a spur to further technology development. The world’s first commercial
scale wind farm, producing 600 kW, was opened in New Hampshire in 1980. (Norwegian
University of Science and Technology 2013)
As of 2013, the world's largest operational wind is the Jiuquan Wind Power Base (Figure 2) in
the Chinese Gansu province, with an installed capacity exceeding 5 GW and a proposed
capacity of approximately 20 GW (Schneider & Smith 2011).

Figure 2: Scenery illustration from Jiuquan Wind Power Base (Schneider & Smith 2011)

By 2012, wind energy production accounted for approximately 500 TWh of annual electricity
production worldwide, equalling almost 3 % of the global electricity consumption (World
Wind Energy Association 2012a). Today, global wind power capacity exceeds 250 GW, with

1
China, USA, Spain and Germany as the predominating countries (World Wind Energy
Association 2012b). However, a certain stagnation in land-based wind farm development in
the bigger markets has been observed, with offshore wind power production developing at a
much higher rate (World Wind Energy Association 2012b). The distribution of global
installed capacity of wind power is presented in Figure 3.

Figure 3: Global installed wind power capacity, derived from (World Wind Energy Association 2012b)

Denmark has been a pioneer country in developing offshore wind energy production. The
world’s first offshore wind farm, Vindeby, was opened off the Danish coast in 1991, and the
Danish coasts are home to the world's top two energy producing offshore wind farms, Horns
Rev 2 and Rødsand 2 (Lindø Offshore Renewables Center 2011).
By end of 2011, the total offshore wind power capacity exceeded 3.5 GW, accounting for
approximately 1.5 % of the global wind power capacity, with only two out of thirteen
countries with operational offshore wind farms situated outside of Europe. Close to all of the
offshore capacity as of 2013 comes from bottom-fixed wind turbines, only a minuscule
fraction of the capacity represents floating pilot wind turbines. (World Wind Energy
Association 2012a)
Shores of Northern European countries account for majorities of the world’s largest offshore
wind farms, with 22 of the largest 25 operational farms, ranging from approximately 60 to
500 MW, and majorities of farms under construction, ranging from 100 to over 600 MW. As
Figure 4 suggests, the UK, Denmark and Germany account for a large number of the world’s
largest operational and under-construction wind farms, as well as a large number of proposed
wind farms with sizes ranging from approximately 1 to 2.5 GW. (Wikipedia 2013)

2
Figure 4: Map of the largest offshore wind farms of Northern Europe, derived from (Wikipedia 2013)

Due to both visual and acoustic pollution and dependency of large land areas, expansion of
land-based wind energy production has been a root of conflict between society and
developers. As a result of this, an increased focus on building wind farms offshore has
emerged over the last decades. Offshore wind energy production provides numerous
advantages over land-based activity:
 Greater applicable areas and less controversial area usage, allowing for higher
numbers of turbines, excluding potentially expensive land rent and minimising the
grid complexity
 Turbines can be larger since transportation by sea is less restricted by turbine size
 Higher wind speeds and less wind turbulence due to less surface roughness makes
offshore wind more suitable for energy production (European Wind Energy
Association 2009b). Higher average wind speeds create the opportunity for offshore
wind turbines to generate a higher percentage of the maximum output compared to
onshore wind turbines (higher capacity factor)
 Lenient restrictions against audible pollution and visual impact allow larger turbine
blades rotating at higher speeds, which in turn lead to an increase in possible energy
production

At the same time, offshore wind energy production also provides numerous disadvantages
over land-based activity:
 Turbines need to operate in a more challenging marine environment, which among
other factors is expected to increase turbine costs
 Less availability due to distance and weather conditions, increasing difficulties for
installation, maintenance and repair of wind turbines and power cables
 Installation of offshore wind turbines is more complex than installation of onshore
equivalents, and requires specialised vessels which are both scarce and expensive

3
 1.1.2 European Plan on Climate Change and Offshore Wind Potential
In March 2007 members of the European Union proposed the European plan on climate
change, the so-called 20-20-20 plan, which was adopted by the European Parliament by
December 2008, in order to play a key role in negotiations for extending the Kyoto Protocol.
The plan’s nickname comes from three of its main targets (European Commission 2012a):
1. Decrease total energy consumption by 20 % by increasing energy efficiency
2. Reach 20 % of total energy consumption from renewable sources of energy
3. Cut emissions of greenhouse gases to 20 % below the 1990 levels by year 2020
Propositions to increase this target to 30 % have been raised

In order to reach these targets, one will have to focus on utilising the vast resources provided
by nature. A 2007 study conducted on behalf of Enova SF, suggests that the theoretic, annual
potential for offshore wind power along the Norwegian coast exceeds 14 000 TWh, of which
almost 95 % are at depths inaccessible for bottom-fixed technologies (Sweco Grøner 2007). A
study conducted by Greenpeace indicates a conservative annual electricity production of
nearly 250 TWh by North Sea offshore wind projects due to be developed between 2020 and
2030 (De Decker et al. 2008).
Offshore wind power has a tremendous potential globally as well as in the North Sea. Studies
have shown that waters off the Californian coast in close proximity to densely populated areas
with spare capacity in existing power grids, provide an annual viable offshore wind potential
of more than 660 TWh, with approximately 90 % of the potential situated in deep waters
(Dvorak et al. 2009). After the 2011 nuclear disaster at the Fukushima nuclear power plant, an
increased focus on clean energy has emerged in Japan, with offshore wind power as a strong
candidate. The Japanese coast provides large potential for offshore wind power, but only a
small percentage of this potential is exploitable using bottom-fixed concepts, so developing
feasible floating concepts will be key in developing Japanese offshore wind industry
(Arakawa 2012). Figure 5 shows that both the North Atlantic and the North Pacific Ocean
have tremendous wind energy potential available near populated areas, developed in 1985 by
the U.S Department of Energy based on 1980 wind data.

Figure 5: Global wind energy potential (U.S. Department of Energy 1985)

4
European Supergrid
Traditionally, power plants, with exceptions of hydro and nuclear power plants, have been
positioned in the near vicinity of load centres, where majorities of the energy are consumed.
Seeing as renewable energy sources, especially offshore sources, in many cases are more
abundant far from load centres, viable exploitation of renewable sources requires a solution
able to transfer power from production site to where the power is likely to be employed. The
European Union has proposed a so-called Supergrid, a network of cables capable of
transferring high voltage power between designated load centre locations on the European
continent, both large populations and to aid in electrifying oil and gas installations in
Northern European waters. As of 2013, a number of large-distance high voltage links
transferring large amounts of power over sea exist, predominantly in Northern Europe, e.g.
connections between Scandinavian countries and the European mainland and connections
between the Great Britain and the European Mainland. A proposed expansion of this grid
could aid in lowering electricity costs in participating countries and better cope with
variations in renewable energy source availability. Connecting multiple offshore wind farms
to a nearby, passing continental link of high capacity could aid in reducing energy costs by
reducing necessities to directly connect wind farms to national, onshore grids. (Edwards
2011)
Figure 6 shows an example on how the currently operating international Northern European
power cables are proposed to be further developed into a Northern European Supergrid. The
Supergrid layout includes terminals and nodes both near population centres and near major,
offshore installations.

Figure 6: Example of a Proposed European Super Grid (Edwards 2011)

Norwegian offshore oil and gas installations contribute to approximately one quarter of the
country's CO2-emissions through gas turbines employed to produce utilised electricity.
Connecting a proposed super grid to offshore oil and gas installations could reduce
greenhouse gas emissions coming from offshore gas turbines, but guaranteeing electricity to
come from renewable sources would prove to be difficult, given how European electricity
often is produced from non-renewable sources. (Høgskolen i Østfold 2012)

5
 1.1.3 Energy Costs and Support Mechanisms for Renewable Energy
Although being a controversial theory, a supported public opinion is that mankind’s
increasing use of energy since the start of the industrial revolution has had severe negative
impacts on environmental conditions on a global basis, embodied through temperature
changes portrayed in Figure 7. This has lead to increased efforts on reducing consumption of
energy from non-renewable sources.

Figure 7: Global surface temperature change over time (NASA/Simmon 2011)

Corresponding with the European plan on climate change (European Commission 2012a), one
possibility for reducing negative impacts from energy use seems to be to increase the use of
energy generated by renewable sources instead of using energy from non-renewable sources.
As Figure 8 suggests, renewable energy is generally more expensive than traditional, fossil
fuels, especially through capital costs. This is mainly due to the fact that renewable
technologies have not had the same time to mature to allow costs to fall, thus making
investment in and use of renewable energy sources less favourable than non-renewable
sources from a strictly economical point of view. In addition to this, renewable energy
projects are often deemed riskier due to uncertainties regarding technology and resource
reliability and availability. (Hogg & O'Regan 2010)
Independent sources indicate the current costs per MWh of European offshore wind energy to
be in the approximate region of €2013 135 - 175 (Douglas Westwood 2010; Scottish Enterprise
2011; The Crown Estate 2012), of which approximately 80 % come from capital costs
associated with construction and installation of the farm, while the remaining value comes
from costs related to operation and maintenance of offshore wind energy plants (Interational
Renewable Energy Agency 2012). By comparison, European onshore wind energy is
expected to have costs of roughly two thirds of its offshore equivalent, with lower values
expected for Northern America and Asia (Interational Renewable Energy Agency 2012).

6
However, severe potential reductions in offshore wind energy costs are suggested through a
variety of cost reduction potentials, e.g. standardisation, optimisation and specialisation of
components in a maturing industry, technological developments, making supply chains more
efficient, taking advantage of expertise within the existing oil and gas industry etc. Costs of
European offshore wind energy based on bottom-fixed plants are indicated at 20 % - 30 %
lower than current costs (Scottish Enterprise 2011; The Crown Estate 2011).

Figure 8: Energy costs by source (U.S. Energy Information Administration 2010)

Consideration to climate, environment and public health is not the only reason to encourage
development of renewable energy industries. Investing in new technologies may help increase
national and in particular local employment near renewable energy plants. Additionally,
technology development may act as a foundation for export of goods and services, especially
through expertise through so-called “first mover advantages”.
The Arab Oil Embargo of 1973 demonstrated the Western World’s dependency on imported
oil, and to be as self-supported as possible with inexpensive energy, and thus reduce
dependency on imported energy, is still an important subject for most countries. Development
of technologies capable of exploiting a country’s energy resources is an important step in
reducing energy import dependencies, which is high in many European countries, as
presented in Figure 9. Reducing dependency on non-renewable sources may also act to
insulate national economies from volatilities in fossil fuel prices. (Authen 2013)

7
Figure 9: European energy import dependency as of 2008 (Barstad 2007)

In order to increase renewable energy use and urge a development of renewable energy
technologies, authorities worldwide encourage renewable energy investments and renewable
energy use through various support mechanisms. Here we aim to discuss some of the more
common mechanisms for increasing renewable energy production or energy efficiency. Note
that a combination of mechanisms is commonly used to support renewable energy
investments and production (Econ Pöyry 2008).

Support Mechanisms
Three main categories of support mechanisms will be presented. These are feed-in tariffs and
feed-in premiums, quota systems and fiscal strategies.

Feed-in Tariffs and Feed-in Premiums

Feed-in tariffs and premiums describe a support mechanism where authorities grant producers
of renewable energy either a given premium per energy unit on current energy prices, or
guaranteed a minimum unit price. The amount of compensation varies between energy
sources. Feed-in tariffs and premiums can be described as so-called compensation regulation,
where the authorities set the level of compensation, and the market regulates the amount of
compensation realised (Econ Pöyry 2008). For electricity producers, feed-in tariffs are more
predictable than feed-in premiums, as the level of received compensation under feed-in tariff
schemes solely depends on energy production, and not additionally on energy prices realised
in the market.
8
Quotas
Quotas describe a support mechanism where authorities award quotas to producers of
renewable energy, and impose a mandatory purchase of certain amounts of these quotas onto
energy consumers (i.e. power companies responsible for distribution of energy to industry and
private use). This generates a market for both energy and quotas, and ensures lower prices
from renewable energy producers, more production of renewable energy and potentially less
production of traditional energy. Quotas can be described as so-called amount regulation, as
the authorities decide the amount of support realised (i.e. the number of quotas imposed) and
the market regulates the level of compensation (i.e. the quota price) (Bye & Hoel 2009).

Fiscal Strategies
Fiscal strategies comprise a number of financial incentives for increasing renewable energy
production awarded, and some examples are subsidies of production facilities or investments,
subsidies set to increase focus on technological development through R&D, and tax deduction
for renewable energy producers. Some countries deploy so-called tendering strategies, where
regulators decide a set volume of renewable energy desired produces, and set a support
regime for this very volume over a set period. Another fiscal strategy to strengthen the
position of renewable energy is imposing increased taxes and fees on use of conventional,
non-renewable energy. However, the latter strategy cannot directly be identified as a support
mechanism, rather as an indirect strategy to increase renewable energy use. (Authen 2013;
Navigant Consulting Inc 2013)

Effects of Different Support Mechanisms

Comparisons of wind power capacity and wind power growth in different European countries
indicate that both capacity and growth tend to be higher in countries where feed-in tariffs or
feed-in premiums are used than countries based on quota systems, where no significant
penetration of wind energy is experienced. Consumer prices for energy also tend to be lower
in countries where feed-in strategies are dominant. (Baumgaertner 2013; European Wind
Energy Association 2009a)

Tax deduction, either through deduction on taxes paid on revenues or through investment
incentives are usually only beneficial to larger, profitable companies, and tend not to
significantly reduce capital expenditures. In order to make increased taxation on non-
renewable energy beneficial to renewable energy producers, these increased taxes somehow
need to be channelled into renewable energy projects. If such distribution of increased taxes is
not realised, renewable energy producers are likely to see few effects on their economics.
(Baumgaertner 2013)

In order to have a flourishing renewable energy industry leading to profitable, mature

industries, governments have to provide support mechanisms balanced enough to attract new
entrants, but at the same time firm enough in order not to attract an unfortunate rush of
stakeholders, so-called windfall effects. A suitable legal framework has to exist, in order to
clarify obligations and duties for various stakeholders in a growing, renewable energy
industry. Support mechanisms should be sustained over periods long enough to ensure capital
costs allocated over adequately big production volumes. The German feed-in tariff system is

9
by many regarded as the world's most promising for stimulation of further wind energy
growth, although generous feed-in tariffs may encourage over-investments. For energy
producers, incentives through quota systems tend to be unpredictable due to the fact that the
market itself is responsible for determining the level of support. Tax deductions and
investment support mechanisms also tend to be unpredictable by not accurately clarifying the
expected level of support. (Baumgaertner 2013; Navigant Consulting Inc 2013)

Figure 10 shows the main support mechanisms for renewable energy in Europe. The figure
shows that mechanisms involving feed-in strategies are prevailing for the Northern European
countries with the most dominant wind energy industry. Additionally, the figure shows some
countries utilise a strategy comprising of a combination of the mentioned categories. One
example is Belgium, where Green certificates are employed. These may be viewed as quota
obligations. However, the price of these certificates are set by the authorities, leading to a
support mechanism which may be viewed as a combination of feed-in premiums and quota
obligation support mechanisms (European Wind Energy Association 2009a).

Advantages and disadvantages related to different support mechanisms, as well as strategies

and compensation employed in European countries with an existing or potential focus on
offshore wind energy, is presented in Appendix 3.

Figure 10: Main support mechanisms across Europe (Renewable Energy 2012)

10
 1.1.4 Wind Turbine Description
A conventional offshore turbine, as defined in this thesis, consists of a tower, a rotor and a
nacelle, all together comprised of as much as 8 000 different components (European Wind
Energy Association 2009a). However, an industry focus is to simplify turbine designs and
reduce the total number of components in order to reduce required maintenance efforts and
improve stability.
For conventional turbines, the rotor is connected to a shaft which drives a generator through a
gearbox, all components housed within a machine housing called the nacelle, as described in
Figure 11. The most common design is a horizontal design, with the rotor rotating about a
horizontal shaft. The combination of the rotor and the nacelle is sometimes described as the
Rotor Nacelle Assembly (RNA), and is connected to the tower of the turbine.
If a substructure (fixed foundation or floater attached to the tower) is added to the turbine, we
get what for this thesis is defined as a wind turbine.

Figure 11: Turbine anatomy illustration, based on a Siemens 2.3 MW turbine (Siemens 2013)

Rotor
The rotor of a turbine consists of rotor blades connected to a rotor hub, which are rotated by
the kinetic energy of the wind, in turn rotating the nacelle drive shaft. The rotor blades are
commonly made of composite materials such as glass-reinforced plastic, and may these days
exceed lengths of 60 m, illustrated in Figure 12. The rotor hub is generally made of cast steel,
and includes possibilities to adjust the rotor blade angle through pitch control to ensure
optimal wind utilisation (European Wind Energy Association 2009a). The rotor may be
placed both upwind (on the windward side) and downwind (on the leeward side) of the
turbine. An upwind placement of the rotor reduces problems with wind shade from the tower
and nacelle, but requires stiffer and thus more expensive rotor blades in order to minimise the
risk of the blades interfering with the tower due to being bent by strong wind loads (Danish
Wind Industry Association 2011b).
11
Over time, an increase in rotor diameters for commercially available turbines has emerged.
Increased rotor size is equivalent to larger areas from which wind energy can be extracted,
leading to increased capacity of wind turbines. Trends in increase of rotor diameters and
corresponding turbine capacity from 2002 to 2013, with rotor diameters marked with dark
blue dots and rated capacities marked with lighter blue triangles, are illustrated in Figure 12
(European Wind Energy Association 2011).

Figure 12: Rated capacity and rotor diameter for offshore wind turbines (European Wind Energy Association
2011)

Nacelle
The nacelle is usually made of fibreglass, and contains key electricity generation components
such as drive shaft, brake system, gearbox, generator, power converter and transformer,
although some components may be incorporated in turbine towers. The shaft is rotated at low
frequencies, which are amplified in the gearbox to better suit the electricity generator. Direct
current from the generator is converted to alternating current in a power converter, and
transformed to higher voltages to satisfy grid requirements (European Wind Energy
Association 2009a). If the wind turbines are placed far away from consumption centres,
power may be converted and transformed to even higher voltages to minimise ohmic losses in
export cables.
In addition to electricity generation components, the nacelle often contains a control unit to
ensure optimal regulation of components with changing external conditions such as wind
speed and direction. An active yaw system ensures the rotor is normal to the wind through
rotating the RNA about the tower top for upwind systems, while a pitch system ensures
optimal blade angles (American Wind Energy Association 2013).

Tower
Large wind turbine towers are usually constructed from tubular sections of rolled steel,
commonly bolted together. Increasing rotor sizes enhance the possible energy which can be
harvested from the wind, leading towers to often range 80 - 100 m tall. For offshore
constructions, large vertical distance between mean sea water line and rotor blades is

12
desirable to diminish the risk of the rotor to be destroyed by waves caused by extreme
weather conditions. Also, higher towers make more preferable wind conditions at higher
altitudes exploitable.

Substructures
Common foundations for land-based wind turbines include soil-buried concrete foundations,
popular on the European continent, and anchoring struts driven and casted into the bedrock,
commonly used in countries of challenging soil conditions, e.g. Norway. Offshore wind tur-
bines are placed several kilometres off the shore, and may either be bottom-fixed, with
foundations resting on or in the seabed, or floating structures, with towers attached to floaters
on the water surface. The most common offshore substructure types are discussed here.

Offshore substructures
The most common bottom-fixed substructure is the monopile, consisting of a long steel pipe
which could be regarded as an extension of the tower down into the seabed. This is a fairly
simple foundation technique, but is poorly suited for depths exceeding 30 m, and raises
environmental concerns in the assembly phase due to sound pollution from driving the
foundation into the seabed. Ranging second in world-wide commercial use is the gravity-
based substructure (GBS), where the tower is connected to a heavy structure resting on the
seabed. The structure is partly constructed on land, and then transported to site where the
weight is increased by adding concrete, sand, rock etc. GBSs are used at depths up to
approximately 30 m, where environmental load impacts are modest. In deeper waters, so-
called Space frame substructures, structures constructed from several piles, are preferable to
monopiles or GBSs. Space frame structures are often divided into tripods and jacket
structures. Tripod structures are constructed from steel pipes, and consist of a central shaft
with three legs that are driven into the seabed, as is the case with monopile structures. Jacket
structures consist of significantly less steel than tripods because of steel positioning further
away from the substructure central axis, making it a highly transparent structure. As for
tripods, jacket structures include piles that are driven into the seabed. The substructure
concepts are illustrated in Figure 13. (European Wind Energy Association 2011)

Figure 13: Bottom-fixed substructures. From left: Monopile, Gravity-based Substructure, Space Frame (Tripod)
and Space Frame (Jacket) (European Wind Energy Association 2011)

13
For floating substructures, three main concepts have emerged: ballast stabilised concepts,
mooring line stabilised concepts and buoyancy stabilised structures. Ballast-stabilised
concepts are stabilised through righting moments caused by ballast positioned below a
buoyancy centre, counteracting pitch and roll rotations and heave motions. One example of a
ballast-stabilised substructure concept is the spar buoy shown in Figure 14. Mooring line
stabilised concepts depend on excess buoyancy to provide tension in the mooring lines, which
makes the structure float deeper than what would have been the case without the mooring
lines. One example of a mooring line stabilised concept is the so-called tension-leg platform
(TLP) shown in Figure 14, which has seen use in the oil and gas industry. The focus on
increasing buoyancy may lead to reduced material costs, but subsequently the tension in the
mooring lines may require improved anchoring technologies. Buoyancy stabilised structures
achieve stability by optimal positioning of buoyancy elements on the substructure. Variations
in external loads and impacts may be counteracted through varying these buoyancy elements,
e.g. by controlling the level of ballast water within certain sections of the substructure. One
example of a buoyancy stabilised concept is the semi-submersible platform in Figure 14. Note
that a floater concept may be regarded as a combination of two or more of the mentioned
main concepts. This is discussed in section 2.1. (Butterfield et al. 2005).

Figure 14: Spar, TLP and semi-submersible platform (European Wind Energy Association 2011)

Table 1 shows key qualities for different offshore substructures, with main focus on dominant
bottom-fixed substructure types. In the table, floating platforms are not further differentiated,
leading to generic results whose validity further rely on employed substructure concept.

Table 1: Comparison of different substructure systems, derived from (Mistri et al. 2010)

Comparison Gravity-based Space Frame Space Frame Floating

Monopile
points Substructure (Tripod) (Jacket) platform
Preferred depth
5 - 30 m 5 - 30 m 25 - 30 m 30 - 50 m More than 50 m
application
Dependency of
Moderate High High High Low
subsoil condition
Installation Difficult Moderate Moderate Moderate Easy/Moderate
Manufacturing Difficult Easy Moderate Moderate Easy/Moderate
Transportability Difficult Easy Moderate Moderate Easy
Removal after
Difficult Moderate Easy Easy Easy
design life

14
 1.2 Problem Definition
This is a thesis intended to act as an overview of costs related to offshore wind energy based
on floating or bottom-fixed concepts deployed at far offshore sites in a commercial scale.

The main purpose of the thesis is to compare levelised costs of energy for different floating
wind turbine concepts.

1.3 Goals and Limitations

This section illuminates both goals intended to be answered during the thesis, and general
limitation, simplifications and assumptions set.

1.3.1 Main Goals

We aim to perform an analysis where we investigate levelised costs of generated energy from
different floating offshore wind turbine concepts with regards to total life cycle costs for the
concepts, and compare with reference wind turbine concepts, both on- and offshore. This
analysis is expected to be realised through several partial goals.

1.3.2 Partial Goals

1. Evaluation of Life Cycle Costs for various floating and bottom-fixed wind turbine
concepts through development, production, assembly, maintenance and de-
commissioning costs for fictitious large-scale wind farms, as described in section 2.2.1
2. Evaluation of per energy unit costs for the different concepts through Levelised Cost
of Energy methodology, further presented in section 1.5.2.
3. Explore how costs are affected by changes in both concept-sensitive parameters, e.g.
steel price and water depth, and also generic input parameters such as offshore
distance, farm size, life span, turbine costs etc., to evaluate how different concepts
react to changes in key cost drivers

1.3.3 Assumptions, Limitations and Simplifications

This section defines certain assumptions, limitations and simplifications set in order to
maintain the contents of this thesis within the thesis scope.

Assumptions
Certain assumptions have been set prior to solving this thesis, including:
1. All comparable concepts are compared at equal terms with regards to commodity
costs, vessel costs, component costs, life spans and site qualities
2. RNA costs are assumed equal for all concepts
3. Mature industries allowing effective large-scale production is assumed
4. Components are assumed to be produced near port, leaving transport costs negligible
5. The thesis intends to evaluate costs related to deployment of wind farms at far
offshore sites

Where reliable data are scarcely available, several assumptions have been set in order to be
able to compute certain cost elements. Examples include operation time consumptions,

15
manufacturing costs and cost changes due to changes in wind farm qualities. These
assumptions are further presented when employed.

Limitations
By reasoning that this is a thesis intended to evaluate economical aspects of offshore wind
farm construction and operation, publicly available sources and sources based on personal
correspondence with industry companies are assumed to give accurate data with regards to
technical feasibility. When source data are scarce or seems improbable, values are discussed
with thesis advisors and adjusted accordingly, indicated by stating thesis advisors as sources.
All values estimated and presented in this thesis are intended not to be either too conservative
or too liberal.

It has been decided to delimitate the thesis towards conceptual and experimental wind turbine
installation methods, by assumptions that introduction of conceptual methods will entail
assumptions of great uncertainty. Accordingly, installation costs for floating concepts are
estimated based on use of existing vessels and existing technology, and horizontal transport of
turbines is not evaluated. For descriptions of certain conceptual installation strategies, (Moss
& Myhr 2009) and (Sanden & Vold 2010) are suggested.

Simplifications
According to offshore renewable energy consortium ORECCA project (Offshore Renewable
Energy Conversion platforms – Coordination Action), two main locations in Northern Europe
stand out as preferable locations for floating wind turbine projects; the northern coast of
Scotland and the western coast of Norway, due to high wind resources, waters deep enough to
support floating concepts and proximity to ports, population, grid infrastructure and
production incentives (Airdoldi et al. 2011). Due to water depth dependencies, it does not
seem feasible to compare floating and bottom-fixed concepts given a fixed location, leading
to decisions not to set an exact location, besides stating a general Northern European location
for the wind farms discussed in the thesis, making the thesis as simplified and generalised as
possible. More information on wind farm qualities is described in section 2.2.1.

If a commercial, large-scale wind park is to be built, adequate respect to existing offshore

activities such as oil and gas operations, shipping and fishing activities has to be shown, with
existing petroleum installations and main shipping lines shown in Figure 15 (Airdoldi et al.
2011). Because of the simplifications set for this thesis, we choose not to take interaction with
fisheries, oil and gas and shipping into more consideration than pointing out that interaction
with these activities is a key part in developing a commercial wind farm.

When planning life cycle phases for an offshore wind farm, it is important to take into
consideration that the ports and vessels required for all operations have to meet each other's
requirements regarding depth and draft, operating space etc. Infrastructure experts indicate
that for ports to be suited for offshore wind operations, a water depth of 10 - 15 m is required,
with suitable Northern European ports shown in Figure 15 (Airdoldi et al. 2011). For this
thesis, we assume that the offshore farm distance set in section 2.2.1 is the distance from the
wind farm to a suitable port connected to adequate road and aerial infrastructure, and with

16
suitable grid infrastructure with available capacity immediately accessible, generically
illustrated in Figure 16.

Figure 15: Shipping density (blue), Northern European oil and gas installations (green) and existing ports
suitable to serve as bases for offshore energy installation and operation (red),derived from (Airdoldi et al. 2011)

To maintain a generic focus, we choose to disregard costs associated with seabed rent and
fees coming from transmission of electricity, as these are cost categories expected to be
severely dependant on location and country for an offshore wind farm project. Accordingly,
any applicable support mechanisms are not quantified for this thesis. If an investment decision
for a real-life wind farm were to be performed, adequate attention to such details should be
paid, depending on project origin.

Figure 16: Envisioned port for offshore wind energy operations (Green Port Hull 2012)

17
 1.4 Employed Terminology
The following gives a brief introduction to terminology used in the thesis, divided into
general, economical and technical terminology. Note that a certain understanding of offshore
wind energy production is required to fully utilise the information presented in the thesis.
Additionally, knowledge of SI units and their derivatives, as well as common marine
terminology, is expected.

General Terminology

Bulk - Untreated steel

Capacity factor - Ratio between annual actual energy production and nominal, theoretical
production (provided full-capacity production at all times)
Comparable - All concepts directly comparable with respect to substructure technology,
concepts i.e. floating or bottom-fixed concepts
Conservative - An estimate expected to be on the safe side of facts
Decommissioning - Disassembly, removal and recirculation of a wind turbine, last phase of
the wind turbine’s life cycle
Deep water - Set to depths exceeding 50 m for this thesis
Generic sources - Sources stating generic information on wide areas within offshore wind
energies. Often developed by independent consultants on behalf of
government agencies. Examples include, but are not limited to, (BVG
Associates 2012), (Douglas Westwood 2010), (Scottish Enterprise 2011)
and (The Crown Estate 2010)
Liberal - Opposite of conservative
MSL and MAMSL - "Mean Sea Level" and "Metres Above Mean Sea Level"
NA - “Not Available” - The requested quality is not available
O&M - "Operation and Maintenance", activities associated with keeping a wind
farm in adequate operational conditions
Offshore - At-sea activity
Onshore - Land-based activity
OW - "Operational window", the average percentage of time a certain operation
is expected to be performed
Shallow water - Set to depths less than 50 m for this thesis
Thrust force - Horizontal force applied by wind on the turbine rotor
WoW - "Waiting on Weather", time spent waiting for weather conditions to
improve enough to undertake certain operations

18
Economical Terminology

CAPEX - "Capital Expenditures", expenses or investments used to upgrade or

obtain physical assets in order to create a future benefit
CAR - "Construction All Risks", insurance covering all types of construction
risks and includes works brought on-site as part of a contract and
temporary works constructed on-site
DECEX "Decommissioning Expenditures", expenses associated with disengage-
ment of the wind farm
EAR - "Erection All Risks", insurance covering plant and machinery
construction risks
FID - "Final Investment Decision", refers to the time and action of deciding to
make a capital investment in hope of gaining profits
Investment - A business expenditure performed in order to generate future monetary
return
LCOE - "Levelised Cost of Energy", all discounted life cycle costs relative to
discounted life time energy production, with all values evaluated at equal
terms with respect to the time value of money
LCOE Analysis - "Levelised Cost of Energy Analysis", performing an economical analysis
to calculate the levelised cost of energy of a product or project
Life time / Life cycle - The time spanning from the initial to the final phases of a product or
project
LCC - "Life Cycle Cost", the total costs associated with a product or project over
all life cycle phases over its entire life time
LCC Analysis - "Life Cycle Cost Analysis", performing an economical analysis to
calculate the life cycle cost of a product or project
NPV - "Net Present Value", the present value of a future monetary amount or
cash flow
OPEX - "Operating Expenses", expenses coming from performing normal
business operations, in this thesis expenses coming from operating and
maintaining a wind turbine or wind farm
WCD - "Works Completion Date" , refers to the point where 100 % of turbines
are operational

19
Technical Terminology

AHTS - “Anchor Handling Tug and Supply”, multi-functional vessels designed

for handling anchors, towing and operating as supply and assistance
vessels
Mooring system - Complete system for mooring of a floating offshore structure, ranging
from the attachment point on the floater to the seabed, including mooring
lines, anchor and all transitional structures between the elements in
question
Ballast - Heavy substance placed near keel of floating structure in order to improve
stability by overcoming turning moments caused by forces due to wind
and mass. Usually consists of either water or substances denser than
water, such as sand, concrete or rocks
Bollard pull - Actual pull capacity of a vessel
Catenary mooring - Mooring system where substantial mooring line weights and lengths make
mooring lines lie along the seabed, resulting in virtually one-dimensional
anchor loads and dampening of construction motions
Crane barge - Vessel with an integrated crane able to perform heavy lifting operations in
calm and protected waters
Crane vessel - Vessel with an integrated crane able to perform heavy lifting operations at
sea
Creep - Elongation of fibre rope mooring lines from load strains and load
variations
Day rate - Per day costs associated with rent of a certain vessel
EIA - "Environmental Impact Assessment", evaluation of environmental, social
end economical impacts associated with a project
FEED - "Front-end engineering and design", transformation of conceptual designs
into realisable solutions
Fibre rope - Ropes produced from synthetic fibres, commonly used as mooring lines
Floater - Main provider of buoyancy and substructure for floating offshore
structures. Commonly described as ranging from 10 m above water line to
the lowest point of the construction
Foundation - Substructure for land-based or bottom-fixed offshore wind turbines
Heave - Translation parallel to the Z axis, commonly understood as up-down
motion normal to water level. See Figure 17
Hywind - Floating wind turbine concept developed by StatoilHydro, with a
substructure consisting of a ballast-stabilised spar buoy with large draft

20
Jack-up vessel - Self-elevating crane vessel developed for installation of bottom-fixed
wind turbines, specialised through having a number of legs used to hoist
the vessel out of the water to protect against harsh seas
Jacket - Space-frame construction used as foundation for bottom-fixed wind
turbines
Monopile - A steel pipe is driven into the seabed in order to act as foundation for
bottom-fixed wind turbines
Nacelle - Housing for the wind turbine’s gearbox, drive train, generator, brake etc.
Pitch - Rotation about the Y axis, see Figure 17
PSV - Platform Supply Vessel
Reliability - The probability that an item will perform its intended function for a
specified interval of time under stated conditions
RNA - Rotor-Nacelle Assembly
Roll - Rotation about the X axis, see Figure 17
Rotor - Collective term for the assembly of rotor blades and rotor hub
Rotor blade - Rotating airfoil attached to rotor hub, which aids in transforming kinetic
energy from the wind into electrical energy through driving a generator
Rotor hub - Transitional piece between rotor blades and the generator drive shaft
ROV - Remotely Operated Underwater Vehicle
Semi-submersible - Stable construction specially developed to cope with harsh weather
conditions by being able to lower itself into the water
Significant wave - The average wave height of the highest one-third of waves within a 20
height minute period
Spar buoy - Large-draft floater concept where stability is achieved through ballast
Substructure - Bottom part of wind turbines, attached to tower. Either floater for floating
concepts or foundation for bottom-fixed or land-based concepts
Surge - Translation parallel to the X axis, commonly understood as forwards-
backwards motion parallel to water level. See Figure 17
Sway - Translation parallel to the Y axis, commonly understood as side-to-side
motion parallel to water level. See Figure 17
SWAY - Wind turbine concept developed by SWAY AS. Stabilised through a
combination of ballast, taut leg mooring and a tension rod system
Taut Leg Mooring - Mooring system where dampening occurs through tension and elasticity
in the mooring lines, arriving the seabed at an angle
TLB - “Taut Leg Buoy” - floater design based on TLP technology, developed by
the Norwegian Institute for Energy Technology (IFE) and the Norwegian

21
 University of Life Sciences (UMB). Subcategorised into TLB B and TLB
X3
TLP - “Tension Leg Platform” - stabilisation technology for floating offshore
installations for which excess buoyancy causes tension in anchoring
cables
Tower - Elements of wind turbine located between nacelle and foundation/floater
Transition piece - Component used to attach the tower of a turbine onto a bottom-fixed
substructure foundation
Turbine - For this thesis defined as tower, nacelle and rotor, but not foundation or
floater
Vertical mooring - Mooring system based on vertical mooring lines and anchors capable of
withstanding true vertical loads
Wind farm - A commercial assembly of wind turbines producing electricity
Wind Turbine - For this thesis defined as foundation/floater and turbine. Differs from
Turbine through taking the foundation or floater into account
WindFloat - Wind turbine concept currently developed by Principle Power Inc. Floater
consists of three-legged, semi-submersible platform, actively
compensating for heave motions
Yaw - Rotation about the Z axis, see Figure 17

Figure 17: Axis system with corresponding translations and rotations

22
 1.5 Methodology
The intention of this section is to present the methodology used in solving this thesis.
Methodology includes evaluation of Life Cycle Costs expanded into a Levelised Cost of
Energy Analysis. Presented are also economical evaluations and employed specialised
software.

1.5.1 Life Cycle Cost Analysis

Life Cycle Cost Analyses are helpful when deciding between alternatives with different initial
and operating costs, but satisfy the same requirements with regards to performance. In order
to minimise the total life cycle cost, one should strive to minimise the total expenses relative
to produced energy, and this can be achieved by weighing and comparing expenses in
different phases during the project’s life cycle. (Shil & Parvez 2007)

Application and Background

In most cases, evaluation of investment expenses as the only criterion for investment
decisions is a bad idea, as solutions involving smaller capital costs in the long run might be a
more expensive alternative than solutions depending on larger capital costs due to high
maintenance and operation costs. A common analogy used when describing Life Cycle Costs
is the Iceberg analogy, as presented in Figure 18 (Shil & Parvez 2007). The figure highlights
the dangers of only taking initial and visible costs into consideration when deciding between
seemingly equivalent alternatives, as the majority of a project’s life cycle costs may seem
invisible at first.

Figure 18: Iceberg of hidden costs, derived from (Clevenger 1996; Shil & Parvez 2007)

23
Common applications for LCC analyses include (Kawauchi & Rausand 1999):
 Comparison between alternative solutions and strategies in regards to concept,
production, operation, maintenance etc.
 Assessment of a project’s economic viability.
 Financial planning.

Life Cycle Phases and LCCA Cost Elements

In this thesis, a project’s life cycle is defined to consist of the following five phases and
corresponding cost elements (RTO/NATO 2007):
1. Development and consenting, where the project is defined, designed and developed.
2. Production and acquisition, where necessary components are either produced or
acquired from external sources.
3. Installation, where all components are installed.
4. Operations and Maintenance, where necessary actions are taken to ensure the farm is
producing electricity.
5. Decommissioning, where the farm is disengaged and refurbished.

Cost flows over the project’s economic lifetime are evaluated at an early stage of the project,
bearing the time value of money in mind.

1.5.2 Levelised Cost of Energy

In this thesis, the Life Cycle Cost Analysis is expanded into a Levelised Cost of Energy
(LCOE) analysis, with use of Present Value methodology (section 1.5.3). The LCOE analysis
evaluates results from the LCC analysis with regards to expected energy production, and
gives the constant unit cost per energy unit of a series of cash flows adding up to the total life
cycle cost of the energy generating facility, illustrated in Figure 19. The LCOE may be
interpreted as the minimum unit price (discounted to present day prices) for which energy has
to be sold in order to break even on the total investment (Black & Veatch 2010), and the
formula for calculating the LCOE may be written as: (Interational Renewable Energy Agency
2012)

∑
( )
(1)
∑
( )

Where:
LCOE denotes the average lifetime levelised cost of energy generation.
It denotes investment expenses at time t.
Mt denotes operation and maintenance costs at time t.
Et denotes energy generation at time t.
r denotes the evaluation discount rate.
t denotes the time, ranging from zero to n.

24
Figure 19: Levelised cost of energy model for a single site in a specific year, derived from (The Crown Estate
2012)

1.5.3 Economical Evaluations

This section will present the main economical methodology used to perform the analyses of
this thesis, through conversion and valuation of monetary values and utilised discount rates.

Present Value Evaluation:

Different cash flows coming from expenses and revenues at different times have to be
evaluated and compared at equal terms, as interest rates, possibilities for immediate use and
uncertainties about the future makes a given amount of money at present time more valuable
than the same amount of money in the future.
For this thesis, we will assess all life cycle costs at Present values, meaning all costs are
evaluated at their reference time value. The present value of a series of costs and cash flows
can be found using the following formula: (Jordan et al. 2008)

∑ (2)
( )

Where:
PV denotes the present day value of the future costs and cash flows.
Ct denotes a cost at time t.
r denotes the evaluation discount rate.
t denotes the time, ranging from zero to n.

Annuity Method:
The annuity method is used to determine the terminal capital consumptions of different
expenses, and can accordingly be used to compare costs of investments in fixed assets to rate
rents for the same assets. The annuities of an investment can be found using the following
formula: (Jordan et al. 2008)

(3)
( )

25
Where:
C denotes the terminal cost.
INV denotes the present value investment cost
r denotes the evaluation discount rate.
t denotes the time frame.

Project Discount Rates

As discussed, costs will have different present values based on when they occur, and it is
therefore important to evaluate future costs at an adequate time value. In doing so, we
evaluate future costs and monetary values of a project using a specific discount rate
depending on expected return from other, often less risky projects, the project risk and macro-
economical qualities such as taxation and inflation.

The discount rate used in our project evaluations will be the Weighted Average Cost of
Capital (WACC), and could be interpreted as what a company would have to pay to security
holders for financing of projects and assets, or so to speak "the overall return the firm must
earn on existing assets to maintain the value of the stock". The WACC is estimated by
average cost of equity and average cost of debt, taking into consideration that some interest on
debt in most cases are tax-deductible. The WACC can be found using the following formula:
(Jordan et al. 2008)

( ) (4)

Where:
E and D denote the market value of equity and debt, respectively.
RE denotes the cost of equity, found from the CAPM model as a function of the risk-free rate,
the expected return on the market portfolio and the specific asset's sensitivity to variations
in the market portfolio.
RD denotes the cost of debt found by adding a risk premium to the risk-free interest rate which
could be achieved through low-risk value allocations.
T denotes the asset tax rate.

The preceding formula gives the nominal weighted average cost of capital, meaning that
monetary inflation is not taken into account. In a 2007 paper conducted on behalf of ENOVA
SF, (Gjølberg & Johnsen 2007) advocate a nominal WACC for renewable energy projects of
10.7 % and a real WACC of 8.2 %, assuming a long-term inflation of 2.5 %. This value will
be used as the baseline discount rate for the projects discussed in this thesis, with lower and
higher values set at ± 1.0 % of real WACC.

Effects on LCOE with changes in discount rates will be discussed in section 5.6.

Monetary Values
All monetary values in this thesis are stated in Euros (€), and converted to equivalent values
as of January 1., 2013, to ensure that all values are compared at equal terms with regards to
increased prices over time due to inflation and market mechanisms. If a source indicates a
monetary value in another currency than Euros, the value is converted to Euros using the

26
historical average exchange rate of the year of the source, and then converted to 2013-Euros
(€2013) using the so-called Industrial Producer Price Index (PPI). The reason behind using the
PPI rather than using the better known Consumer Price Index (CPI), is that the CPI is
regarded to be too consumer- and household-focused to give accurate results as to how
monetary values in the energy industry have inflated over time. The Industrial Producer Price
Index measures change in trading price for industrial products, with two separate sub-indices:
changes in trading prices at the domestic market and at the non-domestic market, which are
combined into a so-called Total Industrial Producer Price Index, which is used to compare
prices in this thesis. (Eurostat 2012)
An average of the annual Total Industrial Producer Price Index in all of the 15 first European
Union member countries1 from 2003 to 2013 with 2005 as the base year is used in this thesis,
to better adjust to the international nature and the Western European dominance of the
European wind energy industry. The annual index values from 2003 to 2012 are given by
(Eurostat 2013), while the index value of January 2013 is estimated by (Eurostat 2013) based
on monthly index values by the end of 2012.
This method of converting values to desired currency before inflating to present day values,
called exchange-first indexing, is somewhat different from inflate-first indexing, where values
are inflated at currency-specific inflation rates before being converted to desired currency at
present day exchange rates. The exchange-first method is a function of one constant and one
variable (respectively an averaged inflation rate and an exchange rate at a given time), while
the inflate-first method is a function of two constants (averaged inflation rate and a certain
exchange rate), which leads to slightly higher variance. Nevertheless, we choose to make use
of the exchange-first method due to the fact that this is a more reasonable alternative in cases
where the exchange rate at an acquisition time impacts costs (Kaiser & Snyder 2010). We
regard the wind power industry sensitive to exchange rates because of its highly international
nature.
Employed conversion rates and index values are presented in Appendix 4.

1.5.4 Specialised Software

The only software used throughout this thesis, expect for conventional word processors,
spreadsheet applications and graphical tools, is the so-called Operation and Maintenance Cost
Estimator calculator (OMCE-Calculator) developed at the Energy Research Centre of the
Netherlands (ECN) (Rademakers et al. 2009), used to estimate costs occurring in the
Operations and Maintenance life cycle phase of wind farms. Central cost elements defined in
this thesis (e.g. labour and vessel costs) are used as input values for the OMCE-Calculator,
which additionally has employed certain built-in default data (e.g. spare part costs, expected
installation times etc.) to supplement the calculator in estimating total O&M costs.

Use of the OMCE-Calculator is presented more thoroughly in section 3.4.2. Certain properties
and default data of the OMCE-Calculator are regarded as confidential information, and will
only be presented in unpublished appendices alongside this thesis.

1
Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands,
Portugal, Spain, Sweden, United Kingdom

27
 2. UNDERLYING CONDITIONS
The purpose of this section is to present competing wind turbine concepts, wind farm site and
turbine definitions, as well as definition of thesis scope. Costs for employed personnel and
vessels utilised for construction, operation and decommissioning of a series of fictitious farms
are also presented.

2.1 Competing Wind Turbine Concepts

This thesis aims to investigate costs occurring over the entire lifetime of a series of fictitious
wind farms, made up of conceptual or realised concepts, presented in Table 2 and Figure 20.
Bases for estimates are presented in section 2.2. Five floating concepts will be presented and
compared to two bottom-fixed concepts.
Table 2: Overview of the analysed concepts (Byklum 2013; Jorde 2013; Myhr & Nygaard 2012; Myhr 2013;
Weinstein 2009)

TLB B and
Name Hywind WindFloat SWAY Bottom fixed
TLB X3
Developer UMB/IFE Statoil ASA Principle Power SWAY AS -
Foundation Tension-Leg- Semi- Tension-Leg- Monopile and
Spar-Buoy
type Buoy (TLB) Submersible Spar (TLS) Jacket structures
Taut leg Catenary Vertical
Catenary system
Mooring system system system -
(4 lines)
(6 lines) (3 lines) (1 line)
Water depth > 75 m > 100 m > 40 m 120 m - 500 m 0 m - 60 m
Substructure 1 100 tons Site and depth
445/521 tons 1 700 tons 2 500 tons
weight (incl. tower) specific
Steel mass +
Steel mass +
draft + Installation + Proven
Strength Stability mooring
mooring draft + stability technology
footprint
footprint
Installation
Challenges Steel mass Steel mass Installation Water depth
+ mooring
Full-scale Full-scale 1:6 scale
Stage of 1:40 scale test
prototype prototype in prototype in Commercial
development in 2013
from 2009 2011 2011

Figure 20: Illustration of the concepts, from left to right; WindFloat, TLB B, TLB X3, Hywind II, SWAY , Jacket,
Monopile and onshore reference

28
 2.1.1 TLB B and TLB X3
The two stiffness-controlled Tension Leg Buoy (TLB) concepts for wind turbine
substructures have for the recent years been investigated and developed in close cooperation
between the Norwegian University of Life Sciences (UMB) and the Norwegian Institute for
Energy Technology (IFE). All substructure Degrees-Of-Freedom (DOF) are stiffness-
controlled since two sets of inclined and taut mooring lines are attached at two heights (Figure
21), bearing strong resemblance to generic TLP concepts, however implementing some
qualities of spar buoys. Many argue that the TLBs are more bottom-fixed than other floating
substructures, since the vertical position is determined by the tendons, and not the water level.
The concepts can be applied at water depths exceeding 75 m and are expected to have
significantly lower steel mass compared to other substructure types at the same water depth.
Accordingly, substructure material costs are assumed to be low, but mooring costs may be
high relative to other floating concepts. The expected increase in mooring costs comes as a
consequence of the taut mooring lines, transferring load variations due to wind and waves
directly to the anchors. (Myhr & Nygaard 2012)

Figure 21: Illustration of the TLB concept (Myhr & Nygaard 2012)

The main difference between TLB B and TLB X3 is the shape of the floater in the area at the
water level. The TLB B has a conical shape in this section, while the TLB X3 has transitions
to three small pipes, shown in Figure 22. This reduction in cross section area will reduce the
surface area where the water line surrounds the floater.

29
Figure 22: Models tested in wave tank. From left to right; TLB X3, Simple reference model, TLB B

In January of 2013, a two-week scale test of the TLB concepts was performed in Brest,
France. The test was enabled by the MARINET (Marine Renewables Infrastructure Network
for Emerging Energy Technologies) program, and financed through the European Com-
mission and their 7th Framework Programme for Research and Technological Development
programme. The main objective behind the test, in addition to evaluating performance for the
TLB concepts, was to obtain data intended to be published to promote further research on
simulation codes for floating wind turbines. Additionally, test data will be used to validate
simulation codes developed at the Norwegian Institute for Energy Technology and the
Norwegian University of Life Sciences.

The overall results of the test seem promising both in regards to serve as data for development
of simulation codes and general performance of the TLB concepts. Even in extreme weather
simulations, the concept models indicated great substructure stability. Installation methods
were also tested, and the scale models responded best to towing of a ballasted system in
regards to safety and speed. Figure 23 shows photographs taken during the testing process.

Figure 23: TLB B and TLB X3 (1:40 scale) tested in Brest, France January 2013

30
 2.1.2 Hywind
Hywind, illustrated in Figure 24 (a), is a floating wind turbine concept developed by
StatoilHydro (now Statoil), which is the first full-scale floating wind turbine concept in the
world. In September 2009, the Hywind pilot turbine was assembled outside Stavanger,
Norway, and towed to its mooring position southwest of Karmøy, Norway, after investments
exceeding €2013 50 million, of which approximately €2013 8 million were granted by
Norwegian governmental sustainable energy enterprise Enova SF (Statoil ASA 2012). The
Hywind pilot, with a draft and a hub height above water line of approximately 100 m and 65
m, respectively, is stabilised using ballast, moored using three catenary mooring lines, and is
equipped with a 2.3 MW upwind turbine delivered by Siemens (Nielsen 2010).
The Hywind pilot has performed highly satisfactory, with capacity factors exceeding 50 % in
2011, withstanding wind speeds of over 40 m/s and wave heights of approximately 19 m. By
spring 2012, the turbine had produced more than 19 GWh. (Rudstrøm 2012)

Figure 24: Left (a): Hywind (Nielsen 2010). Right (b): Hywind II vs. Hywind Demo (Bratland 2011)

According to Statoil, focusing on diminishing draft while increasing the turbine size will be
key while further developing the Hywind concept, as demonstrated in Figure 24 (b) (Bratland
2011). Seeing as substructure tilt motions has had less impact on energy production than
feared, experiences from the pilot turbine have indicated substructure dimensions may be
reduced, leading to lower floater costs (Myhr 2013; Rudstrøm 2012).

Several further pilot projects to evaluate the performance of the further Hywind development
have been proposed, with coastal regions of Maine at the American Atlantic coast as one of
the more developed propositions, associated with the strong academic milieu on offshore
wind power at the University of Maine. A €2013 90 million wind farm consisting of four three-
MW Hywind wind turbines has been proposed commissioned by 2016, and Statoil have
already been granted approximately €2013 3 million from the U.S. Department of Energy.
(Turkel 2013)

31
 2.1.3 WindFloat
The WindFloat concept, developed by Marine Innovation & Technology and commercialised
by Principle Power, consists of a semi-submersible, three-legged platform with a draft
considerably less than its competitors, designed to carry one upwind turbine in the region of
3-10 MW in ocean depths greater than 40 m. Each of the three legs contain ballast water,
which both improves static stability and dynamic stability through an Active Heave
Compensation system, dampening heave motions, ensuring stability through mutual
distribution of ballast water according to wind direction and magnitude. Due to shallow draft
and high stability, it is possible to build WindFloat turbines in a dry dock and tow them to site
using tug boats, but the high stability is made possible through use of large quantities of steel,
leading to severe material costs. An illustration of the concept is shown in Figure 25.
(Principle Power 2011)

Figure 25: WindFloat illustration (Principle Power 2012)

The WindFloat pilot turbine was built and towed to site off the coast of Portugal during fall of
2011, consisting of a 2 MW turbine delivered by Danish turbine producer Vestas (Shahan
2011). Similar to Hywind experiences, the WindFloat pilot has responded promisingly well to
weather conditions and motions, in line with simulations. The pilot project, costing an
estimated €2013 23 million, had generated approximately 3 GWh during its first year of
operation (Maciel 2012).

32
 2.1.4 SWAY
SWAY is a patented floating wind turbine concept developed in Norway by SWAY AS,
illustrated in Figure 26. SWAY is stabilised through a combination of self-stabilising ballast
and TLP technology, and anchored to the seabed using a suction anchor and a pipe marginally
shorter than the water depth, in order for tension to occur in the anchoring system. As
opposed to more conventional concepts, the SWAY concept's nacelle does not rotate around a
bearing at the top of the tower. Instead, the entire system is designed to rotate around a
submerged bearing in the bottom of the structure, which makes strengthening of the tower
through a tension rod system possible. SWAY is designed to carry a down-wind rotor.
(SWAY AS 2012)

Figure 26: SWAY illustration (European Wind Energy Association 2009b)

SWAY is designed to carry turbines in the region of 2.5 - 5 MW (SWAY AS 2012). A main
feat of the SWAY concept is the overall material consumption, expected to be significantly
reduced relative to those of competing pilot projects when adjusted for turbine capacity
(Borgen 2010).
In 2009, SWAY AS were authorised by the Norwegian Water Resources and Energy
Directorate to erect a pilot turbine west of Karmøy, Norway, and in 2011 a 1:6 scaled pilot
turbine was unveiled in Hjeltefjorden, Norway (Amelie 2011). The pilot turbine sank during
harsh weather conditions in late 2011, but was later salvaged and reinstalled during the spring
of 2012 (Steensen 2011; SWAY AS 2012).

33
 2.1.5 Floating Concept Summary
As discussed by (Butterfield et al. 2005), floating substructures may be viewed as a
combination of three main stabilisation concepts: ballast stabilised concepts, mooring line
stabilised concepts and buoyancy stabilised structures. Figure 27 shows the relation between
stabilisation methods for the concepts investigated in this thesis.

Figure 27: Floating substructure stability triangle

As indicated, the evaluated structures are stabilised through varying methods. The Hywind
concept is mainly stabilised through consumption of large ballast masses, and accordingly, the
mooring system does not have to cope with any significant excess buoyancy. However, the
mooring system is expected to provide some heave stability, but is only intended for
horizontal station keeping. The draft of a Hywind concept wind turbine able to carry a 5 MW
turbine is expected to be approximately 80 m (Byklum 2013).

The WindFloat concept is as Hywind expected to be highly stable, and is stabilised through
distribution of buoyancy elements and ballast. As for the Hywind concept, the mooring
system for the WindFloat concept is expected to be mainly for horizontal station keeping. The
draft of the WindFloat is expected to be approximately 25 m (Aubault et al. 2010).

The TLB concepts experience tremendous excess buoyancy, leading to taut mooring lines
keeping the concepts almost completely fixed both vertically and horizontally. The concepts
are expected to have drafts of 50 m (Myhr & Nygaard 2012).

The SWAY concept is indicated to rely on a combination of all of the three stabilisation
systems, and is expected to have a draft just shy of 100 m (Jorde 2013).

34
 2.1.6 Bottom-fixed References
Most of the commercial bottom-fixed wind farms operating as of 2013 are based on monopile
foundations, while gravity-based structures are predominantly used for the rest of the bottom-
fixed installations world-wide. However, jacket structures are, while currently only installed
in small quantities, a commercially feasible solution for water depths exceeding preferred
depths for monopiles and gravity-based structures, due to abilities to carry heavy structures
and resist challenging wave loads, in addition to low material costs. (European Wind Energy
Association 2011)

Figure 28: Illustration of monopile- and jacket-based wind turbines (Hernando & Svendsen 2012)

For this thesis, the floating concepts will be evaluated relative to bottom-fixed references,
both monopile substructures and jacket substructures, respectively illustrated on the left and
right of Figure 28. Monopile structures are the most commonly used substructures for bottom-
fixed wind turbine concepts, but are poorly suited for water depths exceeding approximately
30 m because of insufficient strength and stiffness (Borgen 2010). Accordingly, generic
monopile structures and jacket structures will be evaluated for depths of 30 m.

Note that throughout this thesis, the term monopile refers to both the pile driven into the
seabed and to the transitional piece connecting the pile to the turbine tower, in addition to
secondary structures, that together make up a complete substructure.

35
 2.2 Common Conditions
The intention of this section is to present conditions that are shared by all of the investigated
concepts. These conditions include the general definition of the wind farm, with site
parameters such as distance, weather- and soil conditions. Also included are turbine and scope
definition assumed to be identical for all investigated concepts.

2.2.1 Wind Farm Definition

This thesis discusses fictitious scenarios with wind farms consisting of 100 wind turbines for
each of the seven chosen wind turbine concepts, resulting in wind farm capacities of 500 MW
given a turbine size of 5 MW.

The benchmark distance from shore to the farm is initially set to 200 km for all investigated
concepts, at water depths of 200 m for floating concepts and 30 m for bottom-fixed concepts.
The wind farm is put up as a square formation (10 x 10) with an inner distance between each
turbine of 1 km, as shown in Figure 29. The diagonal of the wind farm is thought oriented in
the prevailing wind direction at site. Throughout the thesis, impact on levelised costs of
energy by variations on parameters such as farm size, water depth, offshore distance and
project life span will be evaluated.

Figure 29: Information about the fictive benchmark wind farm with regards to distances in our scenarios

General wind farm data for the fictive benchmark wind farm are presented in Table 3.

Table 3: Site assumptions for benchmark wind farm case

General wind farm information

Years of development 2013 – 2018
General Commissioning year 2018
Project Life Span 20 years

36
Table 3 continued: Site assumptions for benchmark wind farm case

General wind farm information

Number of wind turbines 100 units
Size of wind farm 500 MW
Size of offshore substation 500 MVA
Turbine type Generic 5 MW
Technical
Water Depth (MSL) for the floating concepts 200 m
Data
Water Depth (MSL) for the bottom-fixed concepts 30 m
Distance to nearest construction and operations port 200 km
Average wind speed at hub height 10 m/s
Site soil conditions Medium clay

Hub height mean wind speed is set to 10 m/s, and speed distribution is assumed to follow the
Weibull distribution presented in Figure 30, derived from (Bierbooms 2010).

Figure 30: Wind speed distribution at site, derived from (Bierbooms 2010)

No exact, geographical location for the farm is set, but the farm is thought to be positioned at
a generic, Northern European site. Weather conditions at sea level are presented in Table 4,
based on average sea state and wave data from the North Atlantic region (Faltinsen 1990).
The soil conditions of the site are assumed to be homogenous clay of medium density.

Table 4: Sea state and wave data: North Atlantic region, derived from (Faltinsen 1990)

Percentage Significant wave height (m)

Sea state
of time Range Mean
0-1 0.70 % 0.0 – 0.1 0.05
2 6.80 % 0.1 – 0.5 0.30
3 23.70 % 0.5 – 1.3 0.88
4 27.80 % 1.3 – 2.5 1.88
5 20.64 % 2.5 – 4.0 3.25
6 13.15 % 4.0 – 6.0 5.00
7 6.05 % 6.0 – 9.0 7.50
8 1.11 % 9.0 – 14.0 11.50
>8 0.05 % >14.0 >14.00

37
 2.2.2 Turbine Definition
All concepts are assumed to be deployed using generic 5 MW turbines. To serve as basis for
these turbines, the theoretical National Renewable Energy Laboratory (NREL) offshore 5 MW
baseline turbine is utilised, a conventional three-bladed upwind turbine developed to support
concept studies for offshore wind technology, based on specifications of the commercially
available REpower 5M turbine made by German turbine manufacturer REpower Systems.
The NREL 5 MW turbine represents a typical utility-scale land- and sea-based megawatt
turbine, also suitable for deployment in deep waters. (Butterfield et al. 2009)

Physical properties of the NREL 5 MW turbine are utilised when needed, i.e. when finding
capacity requirements for lift vessels and turbine cost distributions. Total turbine component
costs are evaluated on basis of generic sources with few direct interests in turbine production.

Seeing as the concept substructures rise a certain height over the water line, the turbine towers
will be shorter than the indicated hub height by the total substructure above-MSL height, for
most concepts 10 m. This reduces total tower height for the towers deployed in our scenarios
in accordance with information provided by (Butterfield et al. 2009).

Accordingly, physical turbine properties of Table 5 come from calculations made in

unpublished work by Raadahl and Vold, based on data from Butterfield et al (2009).
Electrical properties are based on 2011 data provided by REpower Systems. (Butterfield et al.
2009; Raadahl & Vold 2013; REpower Systems 2011)

Table 5: Properties for the generic 5 MW Turbine, derived from (Butterfield et al. 2009; Raadahl & Vold 2013;
REpower Systems 2011)

Generic 5 MW Turbine
Rated power 5 MW
Rotor diameter 126 m
Hub Height 90 m
Rotor mass 110 ton (of which 54 % steel)
Nacelle mass 240 ton (of which 82 % steel
Tower mass 2501 ton (of which 93 % steel)
Rated speed 14 m/s
Operational wind 3.5 m/s (cut-in)
speed limits 30 m/s (cut-out)
Generator type Double-fed, asynchronous, 6-pole

1) Depending on concept

The turbine is assumed to include a pitch control system (Butterfield et al. 2009). A crane
capable of lifting replacement components weighing up to approximately 2 tons is expected to
be integrated in the turbine nacelle, supported by actual layout of the Repower 5M turbine
(REpower Systems 2011). Additionally, a davit crane is assumed to be positioned near the
base of the tower for each concept, enabling possibilities to hoist replacement components
from service vessels.

38
 2.2.3 Energy Production
To better understand the nature of electricity generation of a wind turbine, it is important to
note that a wind turbine will not produce its rated power at all times, depending on weather
conditions and mechanical and electric losses.

Capacity Factor
A wind turbine requires a certain wind speed, the so-called cut-in speed, to start to produce
electric power, and will not produce its rated power before the wind speed exceeds a given
value, known as the turbine's rated wind speed. When wind speeds increase, the power
control unit of the wind turbine constricts the power output from the turbine to ensure that
energy production does not exceed the power rating, and in order to reduce chances of
damages on the turbine, the turbine will continue to produce it's rated power until the wind
speed reaches the cut-off speed, the maximum allowed operational wind speed for the wind
turbine. Figure 31 shows the turbine power distribution curve for a REpower 5M offshore
turbine, with a cut-in speed of 3.5 m/s, a rated speed of 14 m/s and a cut-off speed of 30 m/s.

Figure 31: Turbine power curve, derived from (REpower Systems 2011)

Calculations performed by German physicist Alfred Betz states that the maximum energy
which can be harvested from the wind is given by the following relation (Wildi 2006):
(5)

Where:
Pa denotes the maximum power harvestable per square meter (W/m2)
v denotes the wind speed in m/s
B denotes the so-called Betz constant (B ≈ 16/27).
The Betz constant denotes that it is possible to harvest approximately 60 % of the total kinetic
energy of the wind, which is done when the turbine blades are regulated so that the incoming
wind speed is approximately three times higher than the wind speed directly behind the
turbine blades (Danish Wind Industry Association 2011a).

39
According to this formula, a 50 % reduction in wind speed will lead to a nearly 88 % decline
in harvested power. This corresponds with the power curve shown in Figure 31, where the
turbine hits 5 MW of produced power near wind speeds of 14 m/s, with production of only 13
% of this on speeds of 7 m/s.
As important as data on turbine performance is data on site wind conditions, as turbine and
site wind data combined can give accurate data on anticipated turbine energy production. On a
year-to-year basis, wind conditions on a specific site tend not to differentiate much, but
conditions vary throughout the year. In winter time, when the demand for electricity
traditionally is at its greatest, windy conditions and high air density from colder temperatures
lead to slightly higher turbine output. (European Wind Energy Association 2009a).
When evaluating wind electricity production, an important figure is the so-called capacity
factor. The capacity factor is defined as the percent ratio between realised or anticipated
energy production and theoretical production if the turbine were to operate at rated power at
any given moment through a year, and is influenced by production losses due to the wind
climate. The term wind climate treats not only wind speeds, but also turbulence, wind shear
(wind speed differences between the lower and the upper part of the rotor) and extreme winds
and gusts. Note that capacity factor alone is no good measurement for the profitability of a
certain wind turbine at a certain cite, as the number is more a measure of efficiency than
productivity. By manipulating turbine design and generator size to more effectively operate at
lower wind speeds, it is possible to enhance the capacity factor, but in turn reduce
productivity. Increase in generator size does not necessarily contribute to a proportional
increase in total turbine cost, so wind turbine designers often incorporate larger generators to
better profit from those days when wind speeds are high, leading to average capacity factor
decline, but often greater productivity and thus greater profitability (European Wind Energy
Association 2009a).
By reason that capacity factors depend on several factors, direct comparison of experienced
capacity factors between wind farms without consideration for turbine data is not a good
measure for either wind conditions or site profitability, as comparisons should only be
executed when turbine conditions are similar. Figure 32 shows the anticipated capacity factor
in Northern European waters for a REpower 5M turbine, hub height at 100 MAMSL (Kjeller
Vindteknikk / Norwegian Water Resources and Energy Directorate 2010).
The goal for every wind energy producer is to minimise the total life cycle cost per unit of
output energy. Seeing as the available wind energy is both free and to a certain degree
unlimitedly available, a turbine designer will prefer a design that limits both efficiency and
also life cycle energy productivity to a design that is technically superior in terms of
efficiency and productivity, as long as the technically inferior solution lowers the levelised
life cycle costs. (European Wind Energy Association 2009a)
Based on expected projections of offshore wind energy capacity factors and experienced
capacity factors of floating wind turbine pilot projects, a baseline capacity factor of 53 % is
assumed in this thesis (Open Energy Info 2013). Low and high scenarios are set to ± 3 %.
Changes in LCOE with changing capacity factors will be discussed later in the thesis.

40
Figure 32: Capacity factors at Northern European sites, based on REpower 5M (Kjeller Vindteknikk /
Norwegian Water Resources and Energy Directorate 2010)

Load Factor
The net output on the electricity grid is not only affected by wind climate condition losses,
also a series of other losses from external and internal effects have negative impact on
electricity generation. We may divide these losses into electrical array losses, aerodynamic
losses, wind farm availability and other losses (European Wind Energy Association 2009a).
Subtracting these losses from the capacity factor gives the so-called load factor, which is the
ratio between realised or anticipated grid output and theoretical production (Howard 2012).
The relation between theoretical production, capacity factor and load factor is shown in
Figure 33.

41
Figure 33: Relation between theoretical production, capacity factor and load factor

Electrical Losses
Electrical losses denote ohmic losses dissipated as heat in the inter-array cables, export cables
and substation. The losses vary with farm layout, voltage levels and cable length, and
discussions in section 3.2.4 and Appendix 7 indicate total electric losses to be approximately
1.8 %. However, these losses are estimated on simplified grounds, and may be somewhat
uncertain, as other factors not discussed in this thesis may influence losses.

Aerodynamic Losses
Aerodynamic array losses occur when wind turbines shadow one another in a wind farm,
leaving less energy in the wind downstream of each turbine. Both mean wind speed,
turbulence intensity, turbine spacing and rotor diameter affects the aerodynamic array losses.
As the turbines are located closer to each other, smaller relative distance between turbines
progressively disallows the wake effects to be dissipated before the wake effects from the
next turbines are encountered.

(European Wind Energy Association 2009a) estimate these losses may account for 5 - 10 %
of the theoretical output. Based on a turbine spacing of nine times the rotor diameter in the
prevailing wind direction and a wind speed of 10 m/s at 100 m above mean sea level, (BVG
Associates 2012) estimate the these losses to on average be 7.75 % for a 5 MW wind turbine
farm. This turbine spacing is lower than the ones used in our wind farm definitions, leading to
assumptions that an average loss percentage of 7.0 % may be estimated for our calculations.

Wind farm Availability

Wind farm availabilities denote the average percentage of time the wind turbines may operate,
involving downtime from mechanical failure, maintenance etc. The wind farm availability
includes the wind turbine, inter-array and export cables and substation availability. In general,
wind farm availabilities are often assumed between 95 % (Clayton et al. 2011) and 98 %
42
(European Wind Energy Association 2009a). Positioning of the thesis far offshore, and harsh
weather conditions affect the wind farms defined in this thesis, and general availability for
benchmark wind farms is in section 3.4.3 simulated to be approximately 90 – 96 %, with
baseline figures at approximately 94 %, with minor differences between floating and bottom-
fixed concepts from stochastic simulations.

Other Losses
A series of other losses affect the actual performance of the wind farm with respect to
theoretical power output. We may for simplicity divide these other effects into losses from
hysteresis, losses from power curve degradation and losses from diminishing of power
performance (BVG Associates 2012).

Hysteresis losses are losses coming from rapid changes in wind direction to such an extent the
yaw mechanism of the wind turbine may not sufficiently and efficiently keep up with. Power
curve degradation losses come from the fact that turbine power curves are constructed from
ideal data, and do not sufficiently depict real world conditions (European Wind Energy
Association 2009b). These losses are estimated to 1 % (BVG Associates 2012; Clayton et al.
2011; European Wind Energy Association 2009a).

Diminishing of power performance through soiling effects, and in particular so-called in-
cloud icings have potentially severe negative effects on wind turbines. Not only does ice on
the structure pose as a potential danger to anyone or anything at site through ice shedding, ice
loads may also increase fatigue and failure risks from vibrations and resonance. More
important to energy production in Northern European waters, icing on rotor surfaces could
also impair aerodynamic abilities, resulting in poorer turbine performance (Haaland 2011).
When taking soiling from dust, corrosion etc. into consideration, power performance losses
have been estimated to 2 % (European Wind Energy Association 2009a). Combining these
with hysteresis and power curve degradation losses sets the total other losses to 3 %.

Load factor calculation

The total load factor for the benchmark wind farms rely both on factors that go beyond the
scope of this thesis, e.g. aerodynamic losses, and factors that will be discussed more
profoundly throughout the thesis. The baseline load factor used for floating concepts in this
thesis is presented in Table 6.
Table 6: Baseline load factor

Energy Production
Theoretical production (MWh/MW/yr) 8 760
Capacity factor 53.0 %
Net load factor 44.0 %
Wind farm availability 93.8 %
Aerodynamic array losses 7.0 %
Electrical array losses 1.8 %
Other losses 3.0 %
Net energy production (MWh/MW/yr) 3 859

43
 2.2.4 Scope and Viewpoint Definition
When evaluating costs for offshore wind power projects, it is important to bear in mind that
several company types may be involved in the supply chain from realising a turbine concept
to erecting a commercial, offshore wind farm. The European Wind Energy Association
operates with eight different company types involved in offshore wind supply chains
(European Wind Energy Association 2011):
 Turbine manufacturers - designs and supplies turbines. Examples: Vestas, REpower,
Siemens
 Structural manufacturers - manufactures substructures for wind turbines and
possibly offshore substations. Examples: Aker, Smulders, Burntisland Fabrications
 Electrical equipment manufacturers - designs electrical systems and supplies
electrical equipment for offshore and onshore use. Examples: ABB, Siemens
 Marine contractors - installs wind turbines, substructures, substations and cables.
Examples: A2SEA, MPI
 Cable suppliers - supplies both export and array cables. Example: Nexans, Prysmian
 Cable installers - Marine contractors specialised in cable installation niche.
Examples: Technip, Visser & Smit
 Engineering, Procurement, Construction and Installation contractors - larger
firms or ventures from above mentioned categories, responsible for broader parts of
the supply chain. Acquires necessary materials for production, and produces,
transports and installs the product in exchange for a fixed price. Examples: ABJV, MT
Højgaard, Subsea7
 Port operators - provides manufacturing and assembly properties, operation and
maintenance base

Figure 34: Company types participating in wind farm supply chain (European Wind Energy Association 2011)

44
It seems clear that some companies, especially larger multidisciplinary firms, may be able to
perform several parts of the supply chain, and that some parts of the chain may be performed
by several company types, with turbine design and turbine supply as the main exception.
Supply chain scopes are demonstrated in Figure 34, while locations of some of the key
players within the existing, bottom-fixed wind energy industry are presented in Figure 35
(European Wind Energy Association 2011).

Figure 35: Location of key players within the European wind energy industry (European Wind Energy
Association 2011)

When evaluating total life cycle costs for a series of fictive wind farms, it is important to
decide from which point of view this should be done. We have chosen to view the situation
from the eyes of a company rich in both capital and general offshore experience, which, if
desirable, enables possibilities to handle large parts of the supply chain within the company,
such as production of mechanical components and some or all parts of installation and
maintenance of a wind farm through acquisition of production facilities and vessels. This
way, highly specialised operations such as turbine and electrical equipment supply are
handled by specialists.

45
 2.3 Other Conditions
The purpose of this section is to present some of the cost drivers related to installation,
operation and decommissioning of the wind farm. We present commodity costs, evaluated
personnel cost, and finally utilised vessels and their corresponding costs.

2.3.1 Commodity and Personnel Costs

Costs on certain commodities are expected to contribute to large portions of the total capital
costs of a generic wind farm. The dominant costs are expected from materials employed to
construct the wind turbines, which are mainly made of steel. Additionally, fuel costs
contribute to costs for installation, operation and maintenance and decommissioning of the
wind farm.

Steel Costs
A majority of total the total material costs from turbines and substructures comes from steel
consumption, and given the severe mass consumptions per unit, the concept material cost
depend greatly on worldwide steel prices. For this thesis, costs for steel quality S355 are
employed. These prices are volatile, but present day per ton prices from a selection of Chinese
suppliers for S355 plates with thicknesses of 30 - 100 mm, widths of 1 - 4 m and lengths of 6 -
10 m range between approximately €2013 450 - 1 100 Free on board, meaning excluding
freight (Alibaba 2013b).

For baseline calculations for this thesis, a bulk price of €2013 1 000 per ton is set. This price is
based on average estimates from Chinese suppliers, and includes a 25 % addition on plate
prices to account for surface- and corrosion treatment of the members (Tech-wise AS 2001).
Added is also a freight rate, estimated by The Steel Index to be approximately €2013 21 per ton
freighted by sea from China to Europe (The Steel Index 2013).

It is assumed that these prices include coarse dimensioning of the plates, e.g. plates will be
produced and shipped in specified, requested dimensions best suited for large-scale
production in adequate production facilities.

To account for volatility, low and high case steel prices are estimated from higher and lower
values indicated by Chinese suppliers, and are set at ± 40 % of the baseline bulk price,
respectively.

Fuel Costs
Relevant fuel costs when evaluating offshore vessels are costs of bunker fuel, which is in
reality a common definition on all subcategories of fuel employed by seagoing vessels. Fuel
costs for this thesis will be based on Marine Gas Oil (MGO) transaction prices in Rotterdam.
Bunker fuel prices are extremely volatile, and could vary severely over time, as indicated in
Figure 36, where European bunker fuel prices and bunker fuel price developments from
January 2006 to January 2012 are shown. Please note that the depicted graph does not show
actual price development of MGO, but rather a weekly weighted average of bunker fuel prices
based on several subcategories of fuel. Resultantly, the graph is not an indicator of MGO
prices, but may act as an indicator of MGO price volatility.

46
Figure 36: European price development of bunker fuel, 2006 - 2012, derived from (Hoag 2011)

Fuel costs employed in this thesis are assumed to be approximately € 2013 640 per ton, based
on mid-April averages of delivered MGO at the port of Rotterdam (Bomann-Larsen 2013;
Bunker Index 2013). This per ton cost is assumed to include all surcharges and fees.

Even though bunker fuel prices tend to vary, it is assumed that fuel costs account for
percentages of the total vessel costs so small that these variances will not be further discussed.
The relation between fuel costs and total vessel costs are presented in section 2.3.2. Based on
relations between day rates excluding fuel and expected fuel consumption, the PSV seems to
be the most sensitive vessel to fuel cost variations. However, a 15 % real increase in fuel cost
leads to an approximate 6 % increase in day rates, and such variations are expected to be
conservatively included in evaluations of the results corresponding to low and high cases of
vessel costs.

Personnel Information
One of the main complaints about offshore wind industries is the severely higher labour costs
for offshore operations. In general, offshore workers require higher wages, and work fewer
hours than onshore equivalents. Baseline estimates for all personnel needed for installation of
the wind farms, beyond the labour costs included in larger vessel rents, are discussed here.

Offshore personnel are assumed to work on shifts lasting 12 hours, with a rest period between
each operation lasting another 12 hours. Given cycles of two weeks offshore prior to a two
week rest period, the total number of annual working 12-hour shifts, and correspondingly,
days, for offshore personnel is set to 182.5 (Dent et al. 2011). Based on assumptions that
offshore installation workers are assumed to be paid similar to offshore wind maintenance
workers, annual labour baseline costs are set to €2013 67 000, giving day rates of
approximately €2013 370. The estimates are based on UK sector offshore wind energy salaries
(Earth Wind & Hire 2013), and adjusted according to assumptions that the relation between
direct and indirect labour costs are equal to that of Norwegian oil and gas industry, with
indirect costs of approximately 40 % of direct costs (Statistics Norway 2010). Low- and high-
cases of day rates are assumed at ± 8 %.

Costs related to personnel employed in the Operations and Maintenance cycle will be
presented in section 3.4.3.
47
 2.3.2 Vessel Information
When evaluating vessels relevant for life cycle costs and levelised costs of energy, we choose
to disregard pre-installation vessels utilised in the development and consenting phases of
offshore wind farms, leaving only vessels used directly for installation, operation and
decommissioning of the wind farm for discussion. We differentiate between two main
categories, installation and service vessels, although vessels designed for multiple purposes
and combinations of installation and service activities exist. Installation vessels, such as crane
-, cable-laying -, and anchor handling vessels are primarily designed to handle installation and
decommissioning activities, but are also used for large maintenance operations. Service
vessels are generally smaller than installation vessels, and supply these stages and tasks
through cargo and personnel transportation and tugging operations. Additionally, a so-called
Mother vessel, acting as an offshore base for technicians and service vessels during the
Operation and Maintenance phase is presented.

Installation Vessels
This section is intended to present typical vessels participating in installation of an offshore
wind farm. Although the vessel types listed in this section are rarely designed solely for wind
turbine installation operations, we will mainly focus on such operations in our descriptions.

Crane Vessels
Crane vessels are designed to lift extremely heavy loads such as substructures, complete
turbines or offshore substations, using a deck-mounted crane. They may come with either
rotating or fixed cranes (so-called sheerlegs), and as either barges or self-propelled ships, with
semi-submersible or catamaran hulls preferred over monohulls due to increased stability. Due
to the capacity and sheer size of the crane, the crane vessels are often limited both in speed
and deck storage capacity, requiring assistance for cargo transportation, manoeuvring and
propulsion (Bard & Thalemann 2011).

Figure 37: Shows Oleg Strashnov installing monopiles (Gusto MSC 2012)

48
Day rate estimates for generic crane vessels suitable for undertaking construction operations
set for this thesis have been estimated from day rates for adequate real-life crane vessels.
Vessels capable of turbine installation operations at both protected and harsh locations are
included.

A generic offshore crane vessel is expected to cost in the region of €2013 400 000 - 600 000 a
day (Bomann-Larsen 2013; den Hollander 2013; Midtsund & Sixtensson 2013), based on
March 2013 day rates for Subsea7's Oleg Strashnov (Figure 37), capable of lifting 5 000 tons
to 102 m (Gusto MSC 2012). These day rate estimates are assumed to include crew costs, but
not fuel costs. The crane vessel is assumed to consume between 33 tons (idle consumption)
and 120 tons (full steam consumption) of bunker fuel daily, with a mean consumption of 48.7
tons per day (Raadahl & Vold 2013).

A generic crane barge of similar capacity for use in calmer waters is expected to cost
approximately €2013 40 000 - 50 000 a day (Bomann-Larsen 2013; Midtsund & Sixtensson
2013). Fuel consumption is expected at approximately 8 tons per day (Gundersen, P. G.
2013). The generic crane barge assumed for this thesis is expected to have similar
specifications as the HLV Uglen (Figure 38) with a lifting capacity of 600 tons. Even though
Uglen is expected to be slightly under-dimensioned for installation activities defined in this
thesis, the day rates of this vessel are expected to be valid also for more suited vessels
(Bomann-Larsen 2013).

Figure 38: The self-propelled heavy lift crane vessel HLV Uglen (Ugland Construction AS 2013)

Mobilisation times for crane vessels are assumed to be one month, and assigned costs are set
as a lump sum equalling four day rates.

Jack-up Vessels
Jack-up vessels are multi-purpose vessels used to install bottom-fixed wind turbines in
shallow waters. The vessels, which may come as either self-propelled ships or barges, contain
three or more legs which the vessel lowers onto the seabed to lift itself above the water line,
severely reducing wave, tidal and current impact on the vessel. Jack-up vessels may
completely mount a turbine on a foundation, and may also because of their often reduced

49
lifting capacity with regards to crane vessels serve feeder vessels during heavy-lift operations.
Due to restrictions on leg lengths, they are not suitable for use in deep waters (Bard &
Thalemann 2011).

Generic jack-up vessel day rates are estimated to be around €2013 130 000 - 200 000
(Midtsund & Sixtensson 2013), with mean fuel consumption of approximately 48.7 tons/day
(Raadahl & Vold 2013). Mobilisation times and corresponding costs are assumed equal to
those of crane vessels.

Cable-laying Vessels
Cable-laying vessels are designed and optimised for handling and installation of both inter-
array and export cables, and consist of on-deck cable storage facilities and adequate,
remotely-operated installation equipment (Bard & Thalemann 2011). For this thesis, cable-
laying vessels will not be evaluated in order to estimate cable installation costs, as these costs
will rather be evaluated as a function of average installation costs per length unit.

Anchor Handling Tug Supply

Anchor Handling Tug Supply vessels (AHTS) are multi-purpose vessels designed to assist in
mooring, tugging and transportation of equipment and cargo for offshore operations. For wind
turbine installation purposes, viable use is installation of anchors and mooring lines, tugging
of larger components and assistance of larger crane vessels in lifting operations.

Figure 39: KL Saltfjord (Valderhaug 2011)

Figure 39 shows 311 feet KL Saltfjord, an AHTS delivering the most powerful bollard pull in
the world, having a maximum pull capacity of 397 metric tons. The vessel is equipped for
operations in the North Sea, and is operated by "K" Line Offshore. (Maritimt Magasin 2011)

For AHTS vessels, costs tend to vary depending on vessel power, impacting towing
capacities. Day rates as for a large AHTS equipped with lifting equipment and an ROV is
estimated at between €2013 60 000 - 80 000, based on March 2013 day rates for an AHTS rated
at more than 22 000 BHP (Bomann-Larsen 2013). Additionally, the AHTS is expected to

50
consume approximately 32.5 tons of bunker fuel daily (Raadahl & Vold 2013). Mobilisation
times are set to three weeks, assigned a lump sum equal to three day rates.

Tugboats
Ranging in size from approximately 70 to 150 feet, tugboats are small, manoeuvrable and
powerful with respect to their size, and are used for propulsion and manoeuvring of larger
vessels either by towing or pushing them (Thorndike 2004). When assisting in offshore
operations, tug boats have to be able to handle rough seas. A suitable size for wind turbine
installation in Northern European waters is expected to be between 80 and 100 feet and have a
bollard pull capacity in the region of 50 to 60 tons, with approximate day rates at
approximately €2013 6 000 - 8 000 (Bomann-Larsen 2013). Additionally, approximately 15
tons of fuel is expected to be consumed daily (Bourbon Offshore 2012).

Platform Supply Vessels

Platform Supply Vessels (PSVs) are ships purposely designed to support offshore activities in
demanding conditions, illustrated in Figure 40. They often include accommodation facilities,
and assist offshore operations through transportation of cargo or personnel. Due to their
ability to handle rough seas and demanding weather conditions, they may also be used as
personnel rescue vessels.

Figure 40: Platform Supply Vessel illustration (Offshore Energy Today 2012)

A main cost driver for PSV vessels is vessel cargo capacity, through deck space and tonnage
capacities. Day rates as of March 2013 for PSVs, with deck areas larger than 750 m2, is
indicated at €2013 30 000 - 36 000, including crew costs (Bomann-Larsen 2013; Midtsund &
Sixtensson 2013). On average, these vessel types are estimated to use approximately 20 tons
51
of bunker fuel per day (Raadahl & Vold 2013). Mobilisation times and costs are set equal to
those of AHTS vessels.

Mobile Crane
A mobile crane is expected to be deployed in loading of turbines onto supply vessels. Day
rates for mobile cranes with capacities upwards of 350 tons, are set at €2013 5 000 - 7 000,
including crew and commodities (Ainschough Crane Hire LTD 2011).

Maintenance Vessels
This section is intended to present typical vessels permanently participating in operation of an
offshore wind farm.

Specialised Maintenance Vessels

Specialised service vessels based on so-called SWATH (Small-Waterplane-Area Twin Hull)
technology is assumed to transport the service personnel to the wind turbines. These vessels
resemble traditional catamarans, but instead of two traditional, parallel hulls, their hulls are
made of submerged pontoons connected to the above-water mass by thin structures, as shown
in Figure 41. This places the majority of the ship displacement as far below the water surface
as possible, resulting in small area at the water plane and increased stability. Because of the
vessels' ability to lower themselves, Odfjell's SWATH vessels may sail in significant wave
heights up to approximately 2.5 m and be moored for work in even higher waves (Odfjell
2013).

Figure 41: SWATH hull vessel illustration (Odfjell Wind AS 2012)

(Odfjell 2013) estimates the investment cost for the specialised vessel to be approximately
€2013 7.5 – 8.5 million. When finding annual costs related to capital costs from vessel
investments and vessel operational costs, annuities are based on a discount rate of 6.5 %,
accounting for capital costs and risks, and a life time of 20 years. The reason for the
somewhat lower discount rate than the previously discussed weighted average cost of capital,

52
is to take into account that acquisition of maintenance vessels may be viewed as a severely
less risky investment than a complete wind farm, leading to a lower risk premium on the cost
of capital. The annual operational costs which comes from repairs, insurances, crew costs
excluding wind farm technicians etc., is stated to be approximately €2013 800 000, and
additionally, a daily fuel consumption of approximately 1.5 tons is expected (Odfjell 2013).
The expected total annual fixed cost for the specialised maintenance vessel is therefore in the
range of €2013 1.9 – 2.0 million. (Odfjell 2013)

Mother Vessel
A viable solution for use as a maintenance platform for technicians when offshore distances
and weather conditions become so challenging that shuttle transit between port and site seems
economically and socially unrealistic, is to use a so-called mother vessel. This is a ship
capable of accommodating service technicians, smaller maintenance vessels and some spare
parts.

Figure 42: Illustration of an offshore mother vessel developed by Ulstein and SeaEnergy (SeaEnergy PLC 2012)

Build costs for a vessel of Ulstein X-bow concept (Figure 42) equipped for operation as a
mother vessel in an offshore wind farm has been indicated at €2013 33.9 – 40.7 million.
Technical details for the vessel includes a length of approximately 185 feet, accommodation
for 30 - 45 wind farm maintenance personnel and two to four smaller vessels, small cranes, a
gangway system and a crew of approximately 20 persons, including medical, cooking and
hygienical personnel. Average daily fuel consumption is assumed to be approximately 6 tons.
(Moldskred 2013)

53
Annual operational costs for the mother vessel are estimated at approximately €2013 9.3
million. These costs include crew labour costs, insurances, maintenance, fuel, food etc. Of the
indicated €2013 9.3 million, more than 80 % comes from crew costs. (Kjærstad 2013)

Based on an economical lifetime of 20 years and a discount rate of 8.2 %, capital cost
annuities are approximately €2013 3.5 – 4.2 million, which leads to annual fixed vessel costs of
approximately €2013 12.8 – 13.5 million.

Other Vessels Involved in Maintenance Operations

In addition to the discussed maintenance vessels, real-life operation of an offshore wind farm
would require use of other several other vessel types. These vessel types include crane vessels
for maintenance or repair operations where heavy components have to be replaced, and these
crane vessels could be crane ships for floating concepts and a jack-up vessel for bottom-fixed
concepts. Additionally, cable-laying vessels or AHTSs for inter-array or export cable
maintenance, supply vessels for component transport, helicopters for special transport etc. are
assumed to be used, but these are likely to be chartered on shorter contracts and not evaluated
as fixed costs.

Vessel Costs
Day rates for offshore construction vessels depend on several factors, such as the market spot
situation from supply/demand mechanisms and contract length.

Seeing as vessel costs account for large parts of the CAPEX and OPEX costs, even small
percentage changes in day rates may lead to large changes in actual CAPEX. Table 7 shows
the daily baseline installation vessel costs chosen for this thesis.

Table 7: Approximate day rates of different vessels for installation purposes, including mean fuel consumption.
All values in €2013

Vessel type Low Base High

Crane vessel € 431 000 € 531 000 € 631 000
Near-shore crane barge € 45 000 € 55 000 € 65 000
Jack-up vessel € 161 000 € 196 000 € 231 000
AHTS € 81 000 € 91 000 € 101 000
Tug boat € 16 000 € 17 000 € 18 000
PSV € 43 000 € 46 000 € 49 000
Mobile crane € 5 000 € 6 000 € 7 000

Table 8 shows annual fixed costs for vessels permanently employed in operation and
maintenance of the wind farms.

Table 8: Annual fixed costs for maintenance vessels, including mean fuel consumption. All values in €2013

Vessel type Low Base High

Specialised maintenance vessel € 1 850 000 € 1 900 000 € 1 950 000
Mother vessel € 12 800 000 € 13 100 000 € 13 500 000

In section 5.6, we aim to evaluate how changes in vessel day rates affect total LCOE for the
different concepts.

54
 3. LIFE CYCLE COST ANALYSES
In this section, we aim to evaluate total life cycle costs for wind farms of different concepts.
The different life cycle phases and cost categories are presented in Figure 43. In chapter 4, the
costs will be summarised and discounted to present day values through placing the
appropriate cost or percentage distribution of cost at an appropriate point of time.

Figure 43: Life cycle phases for a wind farm project (Mabey Bridge 2013; Navingo BV 2012; RXMD Consulting
2012; Siemens 2012a; Vattenfall 2013)

55
 3.1 Development and Consenting
The purpose of the following section is to evaluate costs related to planning and development
of a wind farm, coming from all activities taking place prior to production and acquisition of
components necessary for electricity production. This phase may potentially last long, and
starts with a political decision to open for energy production in a certain area. Concessions for
investigation of site may then be granted to tenders interested in development, installation and
operation of the wind farm. Satisfying site conditions with regards to environmental, technical
and economical aspects may lead to decisions to request permission to completely develop the
farm. Consents and licenses to construct the wind farm and produce electricity have to be
granted prior to actual farm construction taking place.

The following section intends to more thoroughly present costs related to the development
and consenting phase. This phase, and its related costs, is assumed to be equal for all
concepts. Development and consenting is normally divided into two phases; the date up to
Final Investment Decision (FID) and the date from FID to Works Completion Date (WCD).

Project development and consenting up to Final Investment Decision (FID) investigates the
processes up to the point of either placing firm orders to continue with construction of a wind
farm, or closing the project altogether. Many of the key decisions that shape a wind farm
project and, accordingly, its total costs, are taken in this phase. Greater investment in wind
farm design and optimisation at the development stage will eventually be cost saving later in
the project, influenced by both technology and supply changes. This phase consists of wind
farm design, environmental impact assessment and survey operations, as shown in Table 9.
Table 9: Overview over cost components included in development and consenting (The Crown Estate 2010)

Components Function
Project Includes feasibility, licensing, planning, radar services and project
management and management.
development
services
Evaluate environmental impacts by a wind farm on wildlife living in, using or
frequenting the surrounding offshore environment, as well as onshore impacts
from cables and onshore substations. Consists of benthic (seabed/sedimental),
Environmental
pelagic (open sea species), sea mammal and ornithological surveys. In
surveys
addition, evaluation of impact on coastline erosion and sedimentation and
impact on commercial fishing industries may be assessed through collision risk
assessments and commercial fishing studies
Met station Intended to evaluate meteorological and oceanographic conditions at proposed
surveys wind farm site.
Analyses of seabed geophysical and geotechnical conditions and characteristics
Seabed surveys
of proposed wind farm site.
Front-end Develop the wind farm concept prior to contracting and evaluate areas of
engineering and technical uncertainty.
design (FEED)
Assessment of impacts on the community living in or around the coastal area
Human impact near a proposed wind farm. Includes assessment of visual and audible pollution
studies from proposed wind farm, as well as socio-economic and logistical impacts on
the infrastructure in nearby coastal area.

56
Project management and contingencies from FID to WCD includes further investigations and
surveys after FID, including FEED studies, environmental monitoring during construction,
project management and other administrative and professional services such as accountancy
and legal advice and handling of tender offers and enquiries. This includes among others
managing engineering studies, construction contract management activities, planning
applications and EIA. Project management is an essential part of this phase considering the
amount of planning needed for successful construction and operation of a wind farm, and the
amount of external contractors participating in these processes. (BVG Associates 2012)
Development and consenting costs are significantly affected by scale of the wind farm. The
scope and time spent on the different surveys will depend on several variables, such as the
numbers of turbines and the wind farm location. It is likely to see bottlenecks in supply of key
services considering the growth of the offshore wind sector, leading to developers looking for
acceleration of the development and consenting activities (Renewables Advisory Board
2010).

Table 10: Development and consenting costs for a 500 MW offshore wind farm

Crown Scottish Howard -

Source Average
Estate1 Enterprise2 MS Excel 3
Development and
€ 75 807 000 € 124 774 000 € 111 736 000 € 104 106 000
consenting costs (500 MW)

1) Source: (The Crown Estate 2010)

2) Source: (Scottish Enterprise 2011)
3) Source: (Howard 2012)

Table 10 shows development and consenting costs data from studies on a 500 MW wind farm
with bottom-fixed wind turbines. (The Crown Estate 2010) estimates these costs to contribute
around 4.0 % of the total wind farm capital costs, while (Scottish Enterprise 2011) estimates
these costs to contribute around 6.5 %.

The costs shown in Table 10 are based on wind farms with bottom-fixed turbines located
relatively near shore. One key aspect that will likely be lower for a farm based on floating
substructures relative to bottom-fixed farms is the costs related to sea-bed surveys, as the need
for data on soil conditions for floating farms only are utilised for anchoring and cable-laying
purposes. The reduced sea-bed impact on site, in addition to reduced impact on ornithological
aspects, is also expected to reduce costs concerned with environmental surveys. However,
costs associated with front-end engineering are assumed to increase, at least prior to maturing
and possible standardization of floating wind energy industries. Additionally, meteorological
study costs may increase, as deeper waters would require development of floating monitoring
stations. Given that few public data on development and consenting costs for wind farms
based on floating concepts exist, it is assumed that the costs described in Table 9 are equal for
floating and bottom-fixed concept wind farms. This could be considered a conservative
estimate.

It is assumed that the development and consenting costs include the entire needed
infrastructure employed in the phase, such as administrative offices, port locations etc.

57
Additionally, all logistical operations associated with construction, installation and
decommissioning of the wind farms are assumed to be included in these costs. Costs are
expected to include planning layout of wind turbine arrays and optimisation of mooring
system layout.

Figure 44: Development and consenting cost breakdown (BVG Associates 2012; Renewables Advisory Board
2010; Scottish Enterprise 2011; The Crown Estate 2010)

Figure 44 shows a breakdown of the development and consenting costs for a 500 MW wind
farm, averaged from four different sources (BVG Associates 2012; Renewables Advisory
Board 2010; Scottish Enterprise 2011; The Crown Estate 2010). Based on the breakdown in
Figure 44, the development and consenting costs are expected to be distributed as shown in
Table 11. As indicated, project management and development services account for the
majority of the development and consenting costs, while combined surveys account for the
second largest cost component.

Table 11: Breakdown of the development and consenting costs

Description Costs (500 MW)

Project management and development services € 55 613 000
Seabed surveys € 18 659 000
Front-end engineering and design (FEED) € 13 337 000
Met station surveys € 8 585 000
Environmental surveys € 7 911 000
Total development and consenting costs € 104 106 000

With these assumptions, the baseline development and consenting costs for the benchmark
wind farms are assumed to be approximately €2013104.1 million, corresponding to
approximately €2013 208 000 per MW. Based on lower and higher data indicated in Table 10,
low and high scenarios for per MW costs are set to -27 % and +20 %, respectively.

58
With increasing farm sizes, it is expected that total development and consenting costs will not
increase exactly proportional with the farm size increase, but a linear coherence between size
and costs is still assumed. Some cost elements, such as costs associated with certain surveys,
are assumed to be relatively proportional to farm size, while other, such as FEED costs
through mooring system logistical layout and optimising farm with regards to finding a
balance between capital expenditures and energy losses may prove to be increasing
disproportionally with farm size. For this thesis we have conservatively assumed an increase
in total development and consenting cost per 100 additional floating wind turbines within the
farm equal to half of the initial development and consenting costs for the benchmark wind
farms. Bottom-fixed concepts are expected to have more development and consenting costs
proportional to size, as surveys related to benthic conditions at each wind turbine site, as well
as individual engineering of the substructures, are necessary. Accordingly, 100 additional
wind turbines are expected to induce an additional development and consenting cost of three
quarters of the benchmark costs. Cost developments are shown in Figure 45.

Figure 45: Total development and consenting costs (blue - floating, red - bottom-fixed) and costs per MW (black
- floating, green - bottom-fixed), depending on farm size

Construction Phase Insurance

Offshore wind farm projects are capital intensive and involve many contractors and interfaces
and careful evaluation of construction risks is important for a successful project. Relatively
little experience in construction of offshore wind farms and the complexity of the projects has
resulted in several project cost overruns, making insurance essential. The construction phase
insurance provides financial protection from physical damage and delays during the assembly,
transport and construction stages of a project. It plays an important role in supporting
investment in offshore wind projects and is desirable from the perspective of all potential
investors. This will move the risks that can potentially negatively affect the cash flow of the
project, which is the key area of concern for investors at this stage. (PricewaterhouseCoopers
2012)

The insurance market for offshore wind is still relatively immature, and there are limited
public data on the construction stage risks for offshore wind available today
(PricewaterhouseCoopers 2012). Table 12 shows a typical insurance package covering the
entire construction period.

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Table 12: Construction phase insurance (PricewaterhouseCoopers 2012)

Product Triggering events Scope Status for offshore wind

Physical loss of and/or All risks of physical loss Compared to the more
physical damage to the or damage including all established onshore wind
Construction All
“Works” (CAPEX) contact parties as named sector, there are
Risk (CAR)/
during the construction Insurers through a single sometimes restrictions on
Erection All
phase of a project. insurance interface which the level of cover
Risks (EAR)
includes contractor and available, in particular,
subcontractors. cover for defects and the
Physical loss of and/or Loss of revenue as a consequences of defects
Delay in start-up physical damage result of the delay and serial failures,
(DSU)/Advance during the construction triggered by perils insured reflecting the more
Loss of Profits phase of a project under the CAR policy. complex construction
(ALOP) causing a delay to process. This results in
project handover. higher premiums and
Physical loss or All risks of physical loss deductibles.
Third party
damage to people or damage to a third party.
liability
and/or property.

A typical construction phase insurance package covering physical damage and delay in start-
up shown in Table 12 is expected to have a constant cost of around €2013 50 000 per MW,
adding up to €2013 25 million for a 500 MW offshore wind farm (PricewaterhouseCoopers
2012). Low and high case scenarios are set to ± 10 %.

Contingency
As offshore wind farm projects are capital-intensive and involve many contractors and
interfaces, careful evaluation of construction risks is very important. Potential negative events
not covered by insurances may occur during the lifetime of the wind farm, and a contingency
could be applied to cover uncertainties related to all procurement and installation related cost.
The contingency is defined as a percentage addition to the CAPEX costs (excluding
development costs up to FID, construction phase insurance and other financing fees), and a
commonly used share is 10 % (Multiconsult 2012). The contingency could negatively affect
discussions on whether to complete a future, capital-intensive project, but could conversely be
of great importance for minimising the difference between budgeted and obtained life cycle
results in an immature market as floating, offshore wind industry is.

Naturally, it would be preferable to foresee costs related to all future risks to reduce
contingencies, but at the same time, it is important to realise that potential negative events are
not likely to be expected, and that to be financially able to reduce impacts of negative
uncertainties is a key aspect in operating a viable wind farm over the course of several years.

Adding a contingency value to baseline CAPEX costs when developing grounds for an
investment decision may be key to stay within budget. For this thesis, it is however decided
that these contingencies are covered when evaluating low-case scenarios for CAPEX costs,
and accordingly, contingencies are left out of baseline evaluations. In section 5.6, effects on
levelised costs of energy for the evaluated concepts by adding varying contingency
percentages will be introduced.

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 3.2 Production and Acquisition
This section aims to present all capital expenditures coming from production and acquisition
of all components that combined form the wind farm. These components include
substructures, turbines, mooring systems and all electrical equipment necessary to connect the
wind farm to the onshore grid. However, this section does not embrace capital expenditures
coming from installation of said components, as these costs are presented in section 3.3.

3.2.1 Turbine Costs

As explained in section 2.2.2, all concepts, whether on- or offshore, are assumed to be
deployed using generic turbines based on the theoretical NREL 5 MW turbine. One exception
is SWAY, where the tower is an integrated part of the floater, thus removing the need for a
tower to be provided by a turbine manufacturer, resulting in turbine costs for this concept
being reduced by an adequate percentage to account for the tower costs.
Depending on floater configuration, tower height is varied so the top of the tower is set at
87.6 MAMSL, resulting in a hub height of 90 m.
Based on data from the Crown Estate, a cost breakdown of a generic offshore turbine is
presented in Figure 46 (The Crown Estate 2010).

Figure 46: Cost breakdown for an offshore turbine. From 12 o'clock, counting clockwise: Nacelle, rotor, tower
and miscellaneous costs (The Crown Estate 2010)

As indicated, the nacelle and its containing electronic equipment accounts for the single
largest part of the turbine cost. Although being severely lighter than both the tower and the
nacelle, with significantly less steel consumption, the rotor accounts for nearly a quarter of
total turbine costs. This is likely to be due to the consumption of expensive glass and carbon
fibre and the moulding production technique (Figure 47).

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Table 13: Generic 5 MW offshore turbine costs

The
Scottish The Crown
Crown RCN2 NVE4 Average
Enterprise3 Estate5
Estate1
Nacelle € 3 159 000 € 2 821 000 € 3 178 000 NA NA -
Rotor € 1 895 000 € 2 015 000 € 2 241 000 NA NA -
Tower € 1 263 000 € 2 015 000 € 1 598 000 NA NA -
Miscellaneous € 1 263 000 € 1 209 000 € 514 000 NA NA -
Turbine € 7 580 000 € 8 060 000 € 7 531 000 € 6 956 000 € 7 249 000 € 7 475 000
6

Turbine
€ 6 317 000 € 6 851 000 € 7 017 000 € 5 797 0006 € 6 041 000 € 6 405 000
(excl. tower)

1) Source: (The Crown Estate 2010)

2) Source: (Douglas Westwood 2010) on behalf of The Research Committee of Norway
3) Source: (Scottish Enterprise / Douglas Westwood 2011). (Converted from £2011)
4) Source: (Multiconsult 2012) on behalf of The Norwegian Water Resources and Energy Directorate
5) Source: (Howard 2012) - MS Excel LCOE model
6) Interpolated from a tower cost percentage of 16.7 % of total turbine costs as suggested in Figure 46

Table 13 shows turbine cost data from studies conducted on behalf of The Crown Estate, The
Research Committee of Norway (RCN), The Scottish Enterprise and The Norwegian Water
Resources and Energy Directorate (NVE), which suggests an average cost of generic 5 MW
offshore turbines to be approximately €2013 7.5 million, and an average RNA cost to be
approximately €2013 6.4 million (± approximately 10 %). To account for different
tower/floater configurations, tower costs for different concepts will be presented as a part of
concept production cost evaluations. SWAY is designed to accommodate down-wind
turbines, and given large-scale production, we assume equal turbine costs for up-wind and
down-wind turbines, corresponding with opinions of thesis advisor Anders Myhr (Myhr
2013).

Turbine costs are assumed to be constant with increasing farm sizes.

Figure 47: Rotor blade production (Pagnamenta 2010)

62
 3.2.2 Substructure and Tower Costs
The total production costs for the substructures, both floating and bottom-fixed, rely both on
the material consumption and on the manufacturing costs of the substructures. Total
production costs for towers are presented prior to bottom-fixed and floating substructures to
illuminate approximate distribution between said costs. The costs presented in this section are
assumed to be proportional with increasing production volume.

Tower Material Consumption and Production Costs

Based on the generic turbine costs presented in section 3.2.1, a generic turbine tower is
expected on average to cost €2013 1.1 million. The unmodified NREL 5 MW turbine has a
tower weight of approximately 350 tons of steel (Butterfield et al. 2009), and with a given
bulk steel price of €2013 1 000 per ton, this corresponds to an average tower bulk material cost
which equals roughly one third of the total tower cost. These estimates correspond well with
indications from (de Vries 2011), stating that conical structures such as wind turbine towers
are produced in quantities for costs in the region of € 2013 2 000 - 3 000 per ton. Conservative
calculations based on these indications suggest a total tower cost of €2013 1.1 million, showing
a concordance between generic turbine prices and estimates based on total weight, resulting in
use of these estimates for our thesis.

Based on data presented in Table 5, the modified NREL 5 MW tower is expected to contain
approximately 233 tons of steel. Assuming a baseline steel price of €2013 1 000 per ton, the
baseline tower material costs are expected at approximately €2013 233 000, while the total
production costs are rounded to €2013 700 000. These figures are used for all but two concepts
discussed in the thesis. One exception is SWAY, where the tower is an integrated part of the
tower design. The other exception is TLB X3, which has a floater configuration ending at 15
m above MSL, resulting in a tower 5 m shorter than the remaining concepts. A simplified
linear distribution between height and total cost is assumed, leading to tower cost reductions
just shy of 6.5 %, giving a baseline tower cost for the TLB X3 concept of €2013 658 000.
These numbers are also assumed used for the bottom-fixed reference concepts, with
substructures assumed to end at 15 MAMSL.

The differences between these tower costs and those presented in Table 13 come from the
assumptions that towers are modified to reach a hub height of 90 m. Low and high case
scenarios for tower costs are set to ±20 %.

Bottom-fixed Substructures
Production costs through material and manufacturing costs for bottom-fixed substructures are
estimated prior to production costs for floating concepts to act as reference values.

Substructure Material Consumption

Dimensions of bottom-fixed substructures do not only rely on water depth and turbine
dimensions, but also on highly site-specific data such as seabed and weather conditions. Even
within one single park, substructures placed in equal water depths may vary severely in
weight from differences in both diameter and penetration depth due to benthic differences.

63
Based on estimated and actual2 monopile weights for water depths between 25 and 37 m, an
average monopile weight of approximately 870 tons, of which 630 tons for the actual pile and
240 tons for the transition piece, is suggested for a water depth of 30 m (de Vries 2011; Lindø
Offshore Renewables Center 2013). However, as 5 MW turbines have only emerged in the
later years, these values come from weights for monopiles supporting 3.6 MW turbines. To
account for this, one solution could be to evaluate monopile constructions using turbines of
lower capacity. However, it is assumed changing downscaling of the turbine ratings would
have severe ripple effects for the further analysis, e.g. through energy production and costs
related to grid connection. Additionally, scaling of turbines contradicts assumptions set on
comparing concepts at terms as equal as possible. Nevertheless, benthic conditions seem to
have greater impact on monopile dimensions than actual turbine rating, leading to
conservative assumptions that total weight for the monopiles in this thesis could be adjusted
only according to the expected thrust force difference between the two turbine sizes, assumed
to be linear to the turbine rating difference (Lindø Offshore Renewables Center 2013; Myhr
2013). Accordingly, total monopile weight for use at 30 m water depths is estimated at
approximately 1 200 tons.

5 MW jacket structures for deployment at 30 m are estimated to weigh approximately 825

tons, distributed between 510 tons of jacket weight (primary and secondary constructions) and
315 tons of mooring piles (Seidel 2007).

Manufacturing Process for Bottom-fixed Substructures

The manufacturing process (Figure 48 and Figure 49) for the different support structures
starts with creating the primary elements, for both the foundation structure and for the
transition piece. Sheets of steel produced in the required dimensions are delivered from a steel
producer for further processing. The sheets are rolled into tubular sections and the edges are
prepared for welding. The tubular section is welded both from outside and inside at the seam.
To reduce any stress concentrations, the welds are ground if necessary. The welding processes
of such tubular sections are often done in automated processes and the quality of the weld is
ascertained by non-destructive testing. Eccentricities and general shapes of the tubular sec-
tions are inspected to be within allowed tolerances. (de Vries 2011)

Figure 48: Parts of manufacturing processes for monopile structures (de Vries 2011)

The further manufacturing process is substantially different for monopile structures than for
jacket structures. Monopile structures consist of large diameter sections that are heavy, and
the sections are relatively easy lifted into alignment and welded together on top of each other.
2
BelWind, DanTysk, Greater Gabbard, London Array and Meerwind

64
Figure 49: Parts of manufacturing processes for jacket structures (de Vries 2011)

Relative to monopiles, jacket structures consist of much smaller sections that must be
prepared by cutting the brace stubs into the exact predefined shape allowing a perfect fit at a
predefined angle. The joints are then lifted into alignment and welded together with the main
legs of the jacket, and the assembly of the structure involves welding of many connections.
Large-scale production of substructures in specialised production facilities offers
opportunities for automation of the production processes, but given the added geometry
complexity for jackets relative to monopiles, automation of production processes are expected
to be performed to a severely lesser extent for jackets than for monopiles.

After the primary structure is assembled, it requires blasting and the application of a
protective coating. Subsequent items such as ladders and platforms are then mounted.

Manufacturing cost assumptions for bottom-fixed substructures are based on an addition of

100 % and 400 % on baseline material costs for monopiles and jacket structures, respectively,
to accommodate assumptions that monopile material costs account for approximately 50 %
of total production costs (Faaij & Junginger 2004), expected at approximately €2013 2 000 per
ton (de Vries 2011), while total production costs for jackets are expected at €2013 4 000 - 6
000 per ton (Borgen 2010; de Vries 2011). These estimates are supported by Rambøll
Offshore Wind (Offshore Center Danmark 2012). Based on these figures, material costs,
manufacturing costs and corresponding total production costs estimates are presented in Table
14, given an expected baseline steel cost of €2013 1 000 per ton.

Table 14: Production cost estimates for bottom-fixed substructures

Jacket structure
Concept Monopile
Jacket Piles
Material consumption (tons) 1 200 510 315
Material costs € 1 200 000 € 510 000 € 315 000
Addition 100 % 400 % 100 %
Manufacturing costs € 1 200 000 € 2 040 000 € 315 000
Total production costs € 2 400 000 € 3 180 000

As indicated in the table, total production costs of monopiles are roughly three quarters of
production costs for jacket structures. Even though material costs are lower for jackets than
monopiles, the complex geometry complicates manufacturing processes, leading to
substantially higher production costs. From a substructure production point of view, choice of
monopiles over jackets generally looks favourable if the wind farm site conditions qualify for

65
the use of monopiles. However, jacket structures are expected to be more competitive in
deeper waters and under harsher weather conditions.

Floating Substructures
As of spring 2013, only two megawatt scale floating pilot wind turbines, the Hywind pilot and
the WindFloat pilot, have been deployed, leading to lack of data on production costs for large-
scale production of floating substructures.

The Hywind pilot floater was built in Finland by Technip over a period lasting more than half
a year (Technip 2010). It seems obvious that if floating wind projects were to be realised,
large-scale production of substructures would lead to unit costs and production times severely
lower than one-of productions of pilots and prototypes. As to the question of who possible
producers might be, it seems natural to consider producers of bottom-fixed substructures as
companies who might expand their operations to include production of floating substructures.
Production of both floating and bottom-fixed substructures likely include many similar
operations with regards to handling and manipulating large steel volumes into structures of
large diameters. Other possible actors include shipyards, larger multidisciplinary energy com-
panies (Technip, Aker, Siemens etc.) and possibly specialised wind turbine producers due to
their capabilities for producing tubular steel sections.

Floating structures may be produced at a number of facilities, with indoor factories or dry
docks as two feasible solutions. The latter solution may require larger capital investments, but
flooding of the dock after production could simplify launching and towing operations.

Substructure Material Consumption

So far, offshore wind turbine substructures consist mainly of welded and processed steel. We
will focus on steel consumption contributing to the dry weight of the substructures.

Substructure steel consumptions and material costs for the different concepts are presented in
Table 15, based on baseline steel costs.

Substructure Manufacturing
The manufacturing process for wind turbines consists of all tasks exercised to alter and
modify bulk steel and other materials to complete wind turbine components. Examples of
such tasks include rolling, cutting, painting and corrosion treatment of steel plates, and
welding and miscellaneous assembly of materials into complete structures.

It seems obvious that large-scale production of large, offshore structures in a maturing

market, taking specialised production facilities, automated processes and other economies of
scale into account, could severely diminish human labour dependency and unit production
times.

An approximate approach to estimating substructure manufacturing costs could be to

adequately divide the total production costs between material and manufacturing costs. Statoil
suggests a rule of thumb where large-scale production and automated processes could make
labour costs be assumed to approximately equal to material costs, corresponding to ratios for
bottom-fixed structures (Byklum 2013; de Vries 2011; Faaij & Junginger 2004). It is import-
66
ant to point out that the material costs in question do not only come from bulk materials, but
also from course modifications and treatments of materials, and that the rule of thumb could
only be assumed valid for relatively simple or non-complex structures of modest sizes.
Structural complexity will increase labour intensity, while structural size could affect labour
costs both positively and negatively from automation possibilities and handling problems,
respectively. Relatively simple offshore wind turbine floaters such as Hywind could in this
perspective be viewed as modestly simple structures, making the rule of thumb applicable for
the less complex floater concepts (Byklum 2013; Myhr 2013).

For this thesis, it is decided that manufacturing costs are estimated as a percentage addition to
baseline material costs, adjusted for expected structural complexity of concept. Addition
percentages are based on correspondence with advisor Anders Myhr on geometries, diameter
transitions, stiffeners etc., and these addition values are shown in Table 15 and further
presented in Appendix 5.

Total Concept Production Costs

Total production costs for each concept, given large-scale production in a mature industry, are
given as the sum of the material and manufacturing costs and presented in Table 15.

Table 15: Production cost estimates for floating substructures

Concept TLB B TLB X3 Hywind II WindFloat SWAY

Material consumption (costs) 4451 5211 1 7002 2 5003 1 1004
Material costs € 445 000 € 521 000 € 1 700 000 € 2 500 000 € 1 100 000
Manufacturing costs addition 110 %5 130%5 120 %2.5 200 %5.6 150 %6
Manufacturing costs € 489 500 € 677 300 € 2 040 000 € 5 000 000 € 1 650 000
Total production costs € 934 500 € 1 198 300 € 3 740 000 € 7 500 000 € 2 750 000

1) Source: (Myhr & Nygaard 2012)

2) Source: (Byklum 2013)
3) Source: (Weinstein 2009)
4) Source: (Jorde 2013)
5) Source: (Myhr 2013)
6) Source: (Borgen 2010)

As suggested in the table, WindFloat seems to be the most expensive solution when
evaluating production costs for floating substructures, coming from large steel consumption
and complex geometry. Conversely, TLB B seems like the least expensive substructure to
produce, from low steel consumption and relatively non-complex geometry. By comparison
with Table 14, it seems only the TLB concepts are competitive to monopile substructures
when looking at production costs. Additionally, the tower consumption for SWAY is included
in the production costs, indicating that SWAY is also competitive to monopiles when
disregarding tower costs. However, possible counteracting of these costs through mooring
system costs are presented later in the chapter.

Lower and higher values for production costs, both for bottom-fixed and floating concepts,
are conservatively set to ± 40 %, to account for steel price volatility.

67
 3.2.3 Mooring System
A mooring system is used to confine a ship or floating structure to a specific location. In this
thesis, the mooring systems of the evaluated wind turbine concepts are divided into three
main categories; catenary mooring systems, vertical mooring systems and taut leg mooring
systems (Figure 50).

Figure 50: Catenary system, vertical system and taut leg system, derived from (Vryhof Anchors BV 2010a)

The major difference between these systems is that catenary mooring lines arrive the seabed
horizontally, vertical mooring lines arrive the seabed vertically and taut leg mooring lines
arrive the seabed at an angle. Taut leg mooring system is therefore capable of resisting both
horizontal and vertical forces, and restoring forces are generated by elasticity of the mooring
lines. The vertical mooring system is also capable of withstanding both horizontal and vertical
loads, although horizontal loads are not withstood to the same extent. For catenary mooring,
the anchor point is only subjected to horizontal forces, and most of the restoring forces are
generated by the weight of the mooring line. For catenary mooring systems a large mass
clump weight or a buoyancy element may be attached to the mooring lines, creating vertical
forces to influence system stiffness. A disadvantage for the catenary mooring is that the
footprint is bigger than the mooring radius for the other systems with a similar application,
affecting total wind farm seabed area (Vryhof Anchors BV 2010a).

A mooring system consists of a mooring line, connectors and an anchor. A mooring line
connects the anchor on the seafloor to a floating structure, and is typically divided into chain,
wire rope or synthetic fibre rope. Anchors are typically divided into a dead weight anchor,
drag embedment anchor, pile anchor, suction anchor or vertical load anchor, as illustrated in
Figure 51 (Vryhof Anchors BV 2010a).

Figure 51: Different types of anchors. From left to right: Dead Weight Anchor, Drag Embedment Anchor, Pile
Anchor, Suction Anchor or Vertical Load Anchor (Vryhof Anchors BV 2010a)

68
Anchors for Different Mooring Systems and Floater Concepts
For this thesis, an exact site location is not decided, and seabed soil conditions are therefore
assumed to be homogenous, medium clay for purposes of simplifying the thesis. In real life,
soil conditions at a feasible farm site could be expected to vary in type and density, leading to
required use of various anchor types, possibly of different costs and installation procedures.

Anchor for Catenary Mooring System

In a catenary mooring system the anchor line arrives at the seabed horizontally and a Drag
Embedment Anchor (DEA) (Figure 52) is traditionally preferred. This type of anchor is the
most popular type of anchoring point available today. The anchor has been design to penetrate
into the seabed, either partly or fully. The resistance of the soil in front of the anchor
generates the holding capacity and is therefore capable of withstanding large horizontal loads
(Ice Engineering 2009).

Figure 52: Illustration of Drag Embedment Anchor (Vryhof Anchors BV 2010c)

In order to cope with the forces involved in catenary mooring operations, it is expected that
each designated anchor must be able to withstand a horizontal force of 500 tons (Myhr 2013).
A 17 ton Stevshark Mk5 (Figure 53) designed by Vryhof Anchors BV meets the calculated
requirements and is chosen for mooring of concepts requiring catenary mooring in this thesis
because the anchor is well proven and readily available, with a unit price of approximately
€2013 114 000 (Vryhof Anchors BV 2013), with low and high case scenarios set to ± 25 %.
These anchors could be employed for a variety of soil conditions, as the anchors may be
optimised for varying soil conditions by adjusting the shank angle relative to the fluke.

Figure 53: Top and side view of the Stevshark anchor (Vryhof Anchors BV 2010a)

69
Anchor for Vertical Mooring System
In a vertical mooring system the mooring line arrives at the seabed vertically. One possible
anchor type could be a Suction Pile Anchor (SPA), a large diameter hollow steel pipe (Figure
54), installed by being sucked into the seabed by a removable pump. The friction of the soil
along the pipe and lateral soil resistance generates the holding capacity, and the anchor is
therefore capable of withstanding both horizontal and vertical loads (Ice Engineering 2009).

The estimated excess buoyancy of the SWAY concept, which relies on vertical mooring, is
expected to be approximately 700 tons (Jorde 2013). SPAs capable of withstanding vertical
such loads in medium density clay soils are expected to have total weights of approximately
140 tons (Jorde 2013). Total production costs for SPAs are expected to be in the region of
approximately €2013 9 500 - 11 000 per ton of anchor, and given large-scale production, cost
estimates for each unit of suction pile anchor capable of withstanding 700 tons of vertical
force are set to approximately €2013 1.3 – 1.5 million (Ekrem 2013).

Figure 54: Illustration of a Suction Pile Anchor

Anchor for Taut Leg Mooring System

In a taut leg mooring system the anchor line arrives at an angle of approximately 45˚ at the
seabed and use of an anchor capable of withstanding vertical loads, such as a Vertical Load
Anchor (Figure 55) is necessary. The anchors need to be designed to withstand a maximum
mooring design load of approximately 2 000 tons at 45° angle, of which approximately 900
tons comes from the resultant force from the concept excess buoyancy, while the rest comes
from load amplitudes (Myhr & Nygaard 2012; Myhr 2013).

Figure 55: Illustration of Vertical Load Anchor (Vryhof Anchors BV 2010b)

70
The Stevmanta VLA (Figure 56) designed by Vryhof Anchors BV meets the calculated
requirements and is chosen for this type of system because it is the smallest and lightest deep
water anchor available on the market. The suitable fluke size of the Stevmanta VLA anchor is
28 m2, corresponding to a 40 ton anchor with a budgetary price of approximately €2013
278 000, significantly less than an SPA of equal capacity (Vryhof Anchors BV 2013). Low
and high case scenarios for VLA prices are set to ± 25 %.

Figure 56: Top and side view of the Stevmanta Vertical Load Anchor (Vryhof Anchors BV 2010b)

Taut leg mooring systems could also be installed using suction anchors. However, as
indicated in the previous section, suction anchors are expected to be significantly more
expensive than VLA anchors. These cost differences are not expected to be neutralised by
installation processes, both due to the sheer size of suction anchors and the fact that they are
installed through time-consuming pumping operations.

Anchor type summary

Table 16 summarises key advantages and disadvantages related to the different anchor
categories.

Table 16: Advantages and disadvantages for offshore anchor types (Eriksson & Kullander 2013)

Anchor Type Advantages Disadvantages

Drag Embedment - Proven technology. - Exact anchor position cannot be
Anchor (DEA) - Suited to resist horizontal loads. guaranteed.
- Easily retrievable. - Can only take minor vertical loads.
Suction Pile - Exact position of anchor location. - More costly installation.
Anchor (SPA) - High holding power in most soil - May require a larger anchoring vessel
conditions. and more equipment.
- Suited to resist both horizontal and - Large and bulky to handle.
vertical loads.
Vertical Load - Proven technology. - Exact anchor position cannot be
Anchor (VLA) - Suited to resist both horizontal and guaranteed.
vertical loads.

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Mooring Lines
A mooring line is used to connect an anchor to a floating structure, and is typically divided
into chain, wire rope, synthetic fibre rope, or a combination of these. Fibre ropes are often
made of polyester or polyethylene, while chain and wire ropes are made of steel. Choice of
mooring line depends on a number of technical parameters such as the type of mooring
system, water depth, seabed characteristics, and excited loads and required motion character-
istics of the floating structure. During the lifetime of the wind farm, the mooring force
continuously varies in the mooring system, as well as the angle of the line to the seabed. As a
result, the mooring lines are subjected to mechanical wear and tear, which favours use of
chain near the seabed since these are more resistant to sea floor wearing than ropes.
Additionally, clump weights may optionally be hanged onto the mooring lines to optimise the
stiffness of the mooring system. However, consumption of clump weights and their respective
costs are assumed to be so uncertain they will not be evaluated further.

Table 17 summarises key advantages and disadvantages related to the different mooring line
types. (Eriksson & Kullander 2013)
Table 17: Advantages and disadvantages for offshore mooring line types (Eriksson & Kullander 2013)

Mooring Line Type Advantages Disadvantages

Steel Wire Rope - Easy to install - Reduced resistance against wear and tear from long term
- Limited contact with the seabed
weight - Prone to material fatigue
Steel Chain - Can withstand
long term - Heavy weight negatively affecting installation
contact with - Will not penetrate deep into the soil
the seabed
Synthetic Fibre - No resistance against wear and tear from long term
- Easy to install
Rope, polyester or contact with the seabed, without use of coating
- Low weight
polyethylene - Detoriation of structural performance over time

Mooring Line Costs

Here, key costs for certain mooring line types and dimensions are presented. Costs are
estimated to include economies of scale with regards to purchasing prices, and the mooring
line consumption for the benchmark wind farms are expected to be so vast no additional
economies of scale are assumed for increases in farm size. Low and high case scenarios for
mooring line costs are set to ± 25 % of baseline costs, with one exception for vertical mooring
systems, presented accordingly.

Synthetic fibre ropes made from woven synthetic fibres are assumed to be used for taut leg
mooring systems for the TLB concepts. The fibre ropes are expected to be required to
withstand a pre-tension force from excess buoyancy equal to approximately 1 000 tons, and
load amplitudes of approximately 800 tons, leading to a total capacity of approximately 1 800
tons (Myhr & Nygaard 2012; Myhr 2013). For taut leg mooring systems, stiffness is required
to exceed minimum stiffness requirements, regardless of depths, and for the TLB systems,
these stiffness requirements are expected to be approximately 8 · 106 N/m and 5.6 · 106 N/m for

72
the upper and lower mooring lines, respectively (Myhr 2013). Cost indications from (Shahid
2013) suggest approximate benchmark farm upper and lower mooring line costs to approxi-
mately €2013 617 and €2013 602 per m, respectively. Cost estimations for fibre rope mooring
lines are further presented in Appendix 6.

It is decided to delimitate the thesis towards uncertainties on whether or not present fibre rope
technology is suited for deployment at water depths below 500 m. Industry experts indicate
uncertainties with regards to creep and fatigue effects associated with use of fibre ropes on
such depths, and these uncertainties are expected to be best addressed through expensive full
scale tests (Ekrem 2013; Henanger 2011).

Figure 57: Cross sectional area of generic fibre rope (Bridon 2011)

A combination of chains and steel wires (Figure 58 and Figure 59) are assumed to be used as
mooring lines for catenary mooring system concepts, i.e. Hywind and WindFloat. These
mooring systems must be able to withstand horizontal forces of approximately 500 tons, and
to lower the risks of mooring lines failing prior to the anchor being pulled out of the seabed
soil if an extreme load scenario were to occur, breaking loads for wires and chains are set
somewhat higher than anchor capacities (Myhr 2013). A suitable chain for these mooring
systems could be a 76 mm R5 mooring chain, expected to cost approximately €2013 250 per m
(Fossen Shipping 2013). These chains are expected to weigh roughly 126.5 kg per m, with
proof loads and minimum break loads of approximately 500 tons and 715 tons, respectively
(American Bureau of Shipping 2009). Corresponding wire ropes could be 83 mm diameter
galvanised 6x41 mooring wire, expected to cost approximately €2013 45 per m, with minimum
break loads and per m weights of approximately 582 tons and 29 kg per m, respectively
(Gundersen, T. 2013).

Figure 58: Generic mooring chain (Zhang 2013)

73
Figure 59: Illustration of generic mooring wire (Bridon 2013)

For the vertical mooring, SWAY AS prefers use of a steel pipe as a tension leg mooring line
(Figure 60). Given the presented substructure mass, a minimum water depth of approximately
120 m is assumed, to account for wave interactions acting on the substructure (Jorde 2013;
Myhr 2013). For 120 m water depth, this pile is estimated to be approximately 20 m long,
have a diameter of approximately 1 m and a wall thickness of 50 mm (Jorde 2013), leading to
per m pipe weights of approximately 1 170 kg, given S355 steel density of 7 850 kg/m3.

Figure 60: SWAY tension leg and mooring connector (Forland 2011)

As for taut leg mooring systems, constant stiffness is required independent of depth, but it is
assumed much of this stiffness is provided by yaw bearings positioned near the bottom of the
substructure (Jorde 2013). Accordingly, only a small linear increase in cross section area is
assumed with increasing depths, culminating in 70 mm wall thickness at 500 m depths, giving
an increase in cross section area of approximately 9.8 % per 100 m added depth.

Based on online information from Chinese steel vendors, production costs for steel pipes
seem to be directly comparable to steel costs discussed in section 2.3.1 (Alibaba 2013a).

74
However, an addition of 50 % to bulk steel costs are assumed to account for welding
operations in order to achieve adequate lengths for mooring pipes. Accordingly, the baseline
costs for steel pipes used as tension mooring legs for vertical mooring are assumed to be
approximately €2013 1 890 per m for benchmark farm depths, with low and high case scenarios
set to ± 27 % to account for steel price volatility.

Mooring line consumption

Based on mooring system type, the different concepts (Figure 61) are expected to consume
different amounts of mooring lines, and these lines are expected to be of different types.

Figure 61: Floating concept illustration showing mooring system types. From left: WindFloat (catenary), TLB B
and TLB X3 (taut leg), Hywind (catenary) and SWAY (vertical)

Selection of mooring radius and line length for concepts that use catenary mooring system,
are results of fairly extensive simulations and optimisations for each concept at the selected
site, and is not only depending on the water depth as a variable. In this thesis, we will make a
simplification of the catenary mooring line length. For the Hywind concept we assume a line
length of approximately 500 m for 100 m depth, and through a simplified approach, every 100
m additional depth leads to an increase of 150 m of mooring line length (Nygaard 2013). This
assumption leads to a total length of 650 m for each catenary mooring line for the benchmark
farm.

To account for draft differences of the WindFloat and Hywind concepts, each mooring line
employed for the WindFloat concept is assumed to be 60 m longer than the Hywind mooring
lines. For shallower water depths, the line length increases dramatically because of difficulties

75
to obtain the preferred catenary shape of the mooring line. For catenary mooring systems,
some clump weights may be required to be attached to the line in order to create the preferred
shape. Near the mooring line point of soil penetration, some chain is required to create
sufficient friction and to withstand long-term contact with the seabed, and for this thesis the
chain consumption per mooring line is estimated to 50 m (Myhr 2013).

Selection of mooring line length for the concept that uses vertical mooring system is
depending on the water depth as a variable. The SWAY concept has a draft just shy of 100 m.
The 120 m minimum draft indicated for the SWAY concept indicates use of a tension leg pipe
marginally shorter than the difference between the substructure draft and the water depth.
Accordingly, for 200 m depth, a mooring line length of approximately 100 m is expected,
increasing proportionally with water depth.

Selection of mooring radius and line length for concepts that use taut leg mooring system are
depending on the water depth as a variable (linear function). The TLB concepts have mooring
lines attached at two heights, at the bottom, 50 m below the water line, and at approximately
25 m over the water line. The upper line arrives the seabed at an angle of 45°, and for 200 m
depth we assume a mooring system radius of 225 m. The upper and lower lines will then be
approximately 318 m and 270 m, giving mooring line lengths just shy of 589 m.

Table 18 summarises the total length of mooring lines for each concept.

Table 18: Total benchmark length of mooring lines for each concept.

Concept TLB B / TLB X3 – Hywind - WindFloat – SWAY –

6 lines 3 lines 4 lines 1 line
Mooring line length 1 766 m 1 950 m 2 840 m 101 m

Total Mooring Costs

Table 19 summarises total costs related to acquisition of the mooring system for one unit of
the discussed concepts, positioned at a benchmark depth of 200 m. Please note that these val-
ues do not include installation costs for the mooring systems.

Table 19: Floating concept mooring system acquisition costs per wind turbine, benchmark depth

Concept TLB B / TLB X3 Hywind WindFloat SWAY

Anchors 3 x VLA 3 x DPA 4 x DPA 1 x SPA
Anchor costs €2013 834 000 €2013 342 000 €2013 456 000 €2013 1 435 000
Fibre rope length 1 766 m - - -
Chain length - 1 800 m 2 640 m -
Wire length - 150 m 200 m -
Pipe length - - - 101 m
Mooring line costs € 2013
1 077 000 € 2013
119 000 €2013 169 000 €2013 191 000
Total mooring costs €2013 1 911 000 €2013 461 000 € 2013
625 000 € 2013
1 626 000

As indicated, the catenary mooring systems are expected to be the least expensive of the
evaluated mooring systems, while the taut leg mooring systems are indicated to be the most
expensive at benchmark farm depths.

76
 3.2.4 Grid Connection
The purpose of the following section is to present capital acquisition costs of electrical
equipment necessary to connect the wind farms to the onshore electrical grid. There are two
basic types of cable used in an offshore wind farm; inter-array cables and export cables. Both
types of cable are commercially available, have substantial track records and will be discussed
in this section. In addition to cable discussion, use of offshore and onshore substations to
reduce overall electrical losses in the wind farm will be discussed.

Inter-array Cable
The inter-array cable connects each turbine to the offshore substation. The turbine generator is
commonly 690 V and an internal transformer steps up the voltage to the inner-array voltage
(European Wind Energy Association 2011). The inter-array cables are typically standard
medium-voltage equipment rated between 33 and 36 kV, but in the future some developers are
considering the use of 66 kV cabling. The inter-array cable consists of three phase conductors,
typically cobber or aluminium, an insulator and some kind of mechanical and chemical
protection (The Crown Estate 2010).

Inter-array cables are generally relatively short cables. Depending on turbine size and spacing,
the length between each tower is typically around 1 km (The Crown Estate 2010).

Larger distance between towers will lower the wake effects and higher the energy production
per turbine, but at the cost of higher capital and operational expenditure and less energy
production per unit seabed. It is therefore necessary to use reliable software tools to optimise
the array layout for the lowest cost of energy. In our case, we simplify the wind farm layout to
a square layout and set the row and column distance between the towers to 1 km. Generally, a
minimum horizontal distance between towers in the range of 4 - 10 rotor diameters in the
prevailing wind direction and 3 - 6 rotor diameters normal to said direction is advised to mini-
mise wake loss effects (European Wind Energy Association 2009b; Kaiser & Snyder 2010).
Positioning of the benchmark wind farms with the farm diagonal parallel to the most
prevailing wind direction will satisfy mentioned horizontal distance requirements.

To avoid damages due to cable tension and to simplify the cable installation, the cable length
between each wind turbine is in our benchmark cases set to be 1.6 km, as shown in Figure 62,
an increase of 600 m with regards to the horizontal distance between the wind turbines. To
account for varying depths, cable consumption between each wind turbine is set to 1 400 m
plus the assigned water depth.

Figure 62: Cable length between each tower is set to 1.6 km

77
In Appendix 7, several inter-array structures have been discussed. The investigated structures
are simplified and will most likely not represent a realistic inter-array layout, since deciding
which inter-array structure to use for a certain wind farm is a highly site-specific operation.
Nevertheless, the discussed structures will give us a reasonable cable consumption and
corresponding electrical array losses needed to quantify our analysis. Figure 63 shows the
inter-array cable structure that has been chosen for the benchmark farm. The towers are
connected in series of five, with a total of twenty rows, giving a total benchmark cable length
of 191.6 km.

Inter-array cable properties

Total cable length 191.6 km
33 kV cobber cable
Cable type
(300 mm2)
Max power* 500 MW
Max percentage
0.68 %
power loss
Average power* 224MW
Average
percentage power 0.31 %
loss
* Transmitted within the farm

Figure 63: Inter-array cable structure chosen for the benchmark wind farm, with the table showing key qualities
related

Figure 63 summarises the maximum and average percentage power losses within the inter-
array cable structure, estimated as through calculation methods presented in Appendix 7. The
inter-array cable cross section area is set to 300 mm2 as an average value, but for a real-life
farm different portions of the inter-array cable structure may consist of either larger or smaller
cables. The maximum power loss is calculated on the assumption that the total rated power of
the entire wind farm is transmitted through the inter-array structure, while average power loss
is calculated by evaluating power production with regards to expected average capacity factor
and power losses. In section 2.2.3 we assume a load factor of 44.8 % (not taking into account
losses in the cables and substation) which indicates that the average effect transmitted through
the inter-array structure is approximately 224 MW. Based on this assumption, we have
calculated the average effect loss to be 0.3 %.

(Douglas Westwood 2010) estimates the costs for 33 kV AC array cables (240 mm2) to be
approximately €2013 190 000 per km, and (Kristensen 2013) estimates the costs for a 33 KV
AC array cable (300 mm2) to be approximately €2013 325 000 per km. Based on these
estimates, and assumptions that the costs of cables are proportional to the cable section area,
the estimated baseline price is set to €2013 281 000 per km (300 mm2), leading to total inter-
array cable costs for our benchmark farms to approximately €2013 53.8 million. Low and high
case scenarios for the array cable costs are set to ± 15 %. No apparent economies of scale
with increasing farm size are assumed, and with increasing farm sizes, it is assumed farms
consist of individually positioned clusters of 100 turbines, connected to an export hub.

78
Export Cable
The export cable stretches from the offshore substation and to the onshore electrical
transmission system. The export cable consists of a conductor, typically cobber or aluminium,
an insulator and some kind of mechanical and chemical protection. The cable could either be
an AC export cable which consists of three phase conductors or a typical DC export cable
which consists of two single-core conductors, meaning that the DC cables are lighter and
therefore cheaper for a given capacity (The Crown Estate 2010).

Most offshore wind farms are today relatively close to shore and uses AC export cables.
HVAC cables suffer significant losses over longer distances due to reactive power flow, and
the cables have therefore a limitation of about 150 km. HVDC cables is used for long distance
transmission, mainly since the full capacity of the cable system can be used for transferring
active power. If HVDC cables are chosen, an expensive offshore substation is needed and the
savings from the use of these cables are not realised until they are around 80 km long (The
Crown Estate 2010). With the advantages for subsea power transmission and recent
developments in power electronic conversion, the use of HVDC cables has become a more
attractive option for longer distance and larger wind farms. In addition, the economics of the
technology is expected to improve over the next decade due to learning and scale effects
(European Wind Energy Association 2011). Figure 64 gives an indication of the limits of AC
transmission and when DC is preferred.

Figure 64: Technology capabilities for power transmission (Prysmian Powerlink Srl 2012)

AC export cables are typically rated at 132 kV, but in some cases it has been deployed 245 kV
cables. The longest AC export cable is the Isle of Man connector, a 90 kV cable transferring
40 MW on a distance of 104 km. For DC cables, we differentiate between extruded and mass-
impregnated cables. Extruded cables are less expensive than mass-impregnated cables, and
are typically rated between 150 kV and 320 kV. For this rating, each cable is capable of
transferring up to approximately 800 MW, as shown in Figure 64. Mass-impregnated cables
are preferred with increasing power transmission (Bahrman 2011)

79
Deciding which cable to use for a certain wind farm is a highly site-specific operation, and
finding an optimal balance between capital expenditures for the cable and costs from ohmic
losses in the cable based on offshore distance and site-specific conditions impacting energy
production is key. For our benchmark farms, attached calculations (Appendix 7) have
indicated use of one 320 kV HVDC extruded cable with a cross-sectional area of 1 500 mm2
favourable in terms of lowest present equivalent of cable costs and energy loss costs, both
from ohmic cable losses and losses coming from occurrence of complete downtime of farm
due to export cable failure. Average losses are estimated to 0.5 %.

In Appendix 7, the price for this type of cable is indicated to be between €2013 354 000 – 531
000 per km, indicating a baseline export cable cost of €2013 88.6 million for the thesis
benchmark wind farm site (National Grid 2011). Figure 65 shows a typical cross section of an
HVDC export cable.

Figure 65: 200 kV HVDC Extruded 1x1100 mm2 Submarine Cable (Prysmian Powerlink Srl 2012)

Offshore Substation
The offshore substation is used to increase the voltage prior to exporting the power to shore,
and therefore reducing electrical losses. Generally it is no need for an offshore substation if
the wind farm is 100 MW or less, the distance to shore is 15 km or less, or the connection to
the grid is at collection voltage (Douglas Westwood 2010).

Abstracted from Joule's first law and Ohm's law, delivered electric power P is given by as the
product of voltage E and current I from the relation P = EI, meaning that when transferring a
certain power, increase of grid voltage will lead to decline in grid current. As explained in
Appendix 7 ohmic power losses Ploss dissipated in a cable are given as a product of the current
I squared and the total cable resistance R of the cable, Ploss = I2R. To transfer a certain power,
it is therefore desirable to increase voltage in order to reduce current, which in turn diminishes
cable power losses. For a wind farm far offshore, it is by that reasoning wise to increase
voltage in the farm before transferring power through an export cable to shore, and this is
done in the so-called offshore substation. These substations are expensive, but when taking
into consideration that medium voltage cables are unable to transfer powers exceeding 30 - 40
MW, high capital costs for offshore substations pay off for large structures far offshore due to

80
lower energy losses and fewer cables needed to transport the energy to shore (European Wind
Energy Association 2011).

In addition to increasing voltage, substations may convert current from AC to DC. Offshore
substations traditionally consist of electrical equipment needed to convert current and
transform voltage, such as switchgears, transformer, converter, cabling etc., as is the case for
land-based equivalents, but also contains extra protection to cope with the demanding
offshore environment. Substations may also include vessel docking solutions, storage and
maintenance facilities, helicopter decks, safety and fire equipment etc. (Lazaridis 2005).

Two main HVDC transmission technologies exist, Current Source Converters - CSC (also
denoted Line Commutated Converters), and Voltage Source Converters - VSC. HVDC CSC
technology is a well proven technology has been deployed since the 1970s, and is based on
external AC voltage to convert current. HVDC VSC technology requires no independent
power source to convert current, resulting in VSC technology converters being roughly half
the size of CSC technology, and therefore much better suited to be deployed on offshore
platforms. Today, VSC technology is limited with regards to transmission capacity, relative to
CSC technology, but increased focus on development of VSC technology results in
significant increases in expected power rating. (National Grid 2011)

Power engineering giant ABB has been a pioneer in using HVDC technology for power
transmitting purposes for more than fifty years, and introduced their HVDC Light system,
based on underground power transmission in 1997. In 2009, BorWin 1, the world's first
HVDC connection for wind power was installed on a jacket structure at the BARD Offshore 1
wind farm off the German North Sea coast. The connection consists of sea-land cables and
BorWin Alpha (Figure 66), a converter substation, rated to 400 MW, where 36 kV AC was
transformed to 155 kV AC before conversion to ± 150 kV DC. Power is transmitted to the
mainland via two 125 km subsea cables and through the Wadden Sea and onshore by two 75
km cables. The topside dimensions of the converter substations are approximately 50 x 35 x
20 m, with a topside weight of approximately 3 200 tons. (Jones 2009)

Figure 66: BorWin Alpha (Jones 2009)

81
For our benchmark farm, a 500 MW HVDC platform including AC switchgear, transformers,
converter electronics and filters is assumed. The total number of substations and the capacity
of the substation that is required for increasing the farm size will be further discussed in
Appendix 8. In this thesis, we further distinguish between bottom-fixed and floating
substations, since they will have different substructures. This is also discussed in Appendix 8.
The total acquisition costs for a bottom-fixed substation costs (excl. installation) are assumed
to be approximately €2013 143.0 million, and €2013 161.7 million for a floating substation.

Average losses in the substation are set to 1 % (National Grid 2011), giving overall electric
offshore losses of approximately 1.8 %.

Onshore Substation
The onshore substation is used to transform the exported power to the grid voltage at land. If
the export cables are HVDC, the substation will convert the power to three phase AC.

Figure 67 shows the onshore substations at the Norwegian side of the 700 MW NorNed
HVDC cable system, connecting the Norwegian and the Dutch electricity grid (Tubaas &
Olsen 2011).

Figure 67: Feda station, onshore substation for the NorNed subsea power cable system (Tubaas & Olsen 2011)

(The Crown Estate 2010) estimates the cost for an onshore substation to be approximately
half of the cost of the offshore bottom-fixed substation. For our benchmark wind farm, the
total costs for an onshore substation including installation is assumed to be approximately
€2013 71.5 million.

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 3.3 Installation and Commissioning
In this section, we aim to estimate total installation costs for the wind farms, which comes
from transport to site and installation of all substructures, turbines, cables (inter-array and
export cables) and offshore substations. Costs are assumed to be for generic equipment. Wind
farm commissioning costs, i.e. costs associated with finalisation and testing of the wind farm
are assumed to be included in the presented costs.

3.3.1 Substructure and Turbine Installation Method Overview

Assembly Locations
Generally, we may differentiate between three main assembly locations for offshore wind
turbines. Components can be assembled into wind turbines either onshore, in calm and
protected waters near shore, offshore at installation site, or by a combination of these. In
general, the installation process of substructures and turbines could be divided into the
following processes:
1. Quayside loading of components onto utilised transit vessel
2. Transit voyage from port to site
3. Installation of component at site
4. Voyage to next installation site
5. Repetition of installation and voyages until all loaded components are installed
6. Transit voyage from site to port, in order to repeat process

Specialised Vessel Use

When using specialised installation vessel for installation at offshore site, we may
differentiate between two strategies for use of a specialised installation vessel, so-called
feeding and transiting (Figure 68). The installation vessel may either be fed wind turbines or
wind turbine components by smaller vessels which travel back and forth from construction
port to the installation site, or the installation vessel may self travel back and forth from port
to site. The latter method, transiting, requires few other vessels than the specialised
installation vessel, but is both more time-consuming than the feeding strategy, and also
utilises less of the vessel's specialised capacities. However, historically the transiting method
has been preferred when installing large, commercial wind farms. (Bard & Thalemann 2011)

For this thesis, it is decided that for the floating concepts, specialised vessels as much as
possible are fed by smaller vessels when evaluating installation operations at offshore site,
despite being potentially more risky than the transiting method because of offshore transfers.
The reason behind using the feeding method is both because the benchmark farm is positioned
so far offshore the total rent associated with one trip to and from benchmark site positioned
200 km offshore approaches nearly €2013 350 000, when assuming a transit speed of 14 knots,
similar to that of Oleg Strashnov. These costs do not include on- and offshore loading etc.,
only transit times. Similar operations performed with a PSV, with transit speeds of 18 knots
and baseline day rates of €2013 46 000, are expected to cost approximately €2013 26 000.
Taking into account the deck space, indicating an area capacity similar to the assumed

83
capacity of the cheaper PSVs, it seems unreasonable to have a specialised vessel in shuttle
service between port and site. (Gusto MSC 2012)

Figure 68: Specialised vessel use: Feeding (blue) and transiting (green)

For bottom-fixed concepts different assumptions are made, seeing as jack-up vessels may be
utilised. Due to the ratio between the presence of crane vessels and purpose-built jack-up
vessels, jack-up vessel day rates tend to be more reasonable than those of crane vessels
(Midtsund & Sixtensson 2013). Additionally, jack-up vessels tend to have deck space for a
considerable number of turbines or foundations, e.g. either nine turbines or foundations per
trip for MPI Resolution, the first of several jack-up vessels purposely built for wind farm
installations (MPI Offshore 2011). Increased deck capacity and specialised design leads to
assumptions that the transiting method is used for installation of bottom-fixed concepts,
reducing offshore transfer lift hazards.

Turbine Installation
Turbines traditionally consist of at least seven individual components: nacelle, hub, three
rotor blades and two tower sections, which can be transported and installed in a number of
ways ranging from transporting the individual components to site before lifting them in place
with several lifts, to assembling the complete turbine on or near shore before transportation
and a single, heavy lift onto the substructure.

Which installation course that is chosen depends on the total costs of the operation, which are
affected by a number of variables, e.g. number of lifts, crane capacity both on- and offshore,
deck area utilisation etc. Kaiser & Snyder (2010) operate with turbine installation strategies
where the number of lifts range from one (complete turbine assembled near shore before
being lifted onto the substructure) to six (all parts are installed separately onto the
substructure, except the nacelle and hub, which are assembled prior to installation). With
increasing number of lifts, the total offshore installation time per turbine may increase, but the

84
necessary capacity of the crane and of the near-shore infrastructure is reduced. Based on data
from 17 European wind farm installations, a strategy involving a total of four lifts: two tower
sections, nacelle and complete rotor (Figure 69) has been the preferred turbine installation
strategy in more than 40 % of the cases. (Kaiser & Snyder 2010)

Figure 69: Installation of a preassembled rotor at Alpha Ventus (Wilmert 2013)

It is important to point out that preferred turbine installation strategy is extremely site- and
time-specific, depending on both wind and wave conditions. Lifting and installing a complete
rotor could be more challenging than installation of a nacelle because of the ratio between
weight and area affected by wind, which putting severe constraints on the maximum wind
speeds during which the lifting operations can be performed, leading to smaller operational
windows. Finding the right turbine installation strategy for a certain offshore site requires
planning from actual site data, and it is by no means certain that the optimal strategy found for
a given site at a given time will be optimal for another site or even for the given site at a
different point of time. Naturally, it is important to realise that if an offshore wind project
similar to the ones discussed in this thesis were to be executed at a specific site, turbine
installation strategies would have to be evaluated with close attention to site-specific detail,
leading to costs that may be higher or lower than those presented in this thesis. (Midtsund &
Sixtensson 2013)

85
 3.3.2 Installation of Bottom-fixed Concepts
For bottom-fixed wind turbines, the foundation and transitional piece are traditionally
installed before connecting the turbine to the installed foundation. These tasks can be done by
traditional crane vessels, but are commonly done using highly specialised wind turbine
installation vessels, based on jack-up technology.

Based on data from commercial-scale wind farm projects in Northern European waters, an
average installation time of 2.6 boat days per monopile is indicated (Kaiser & Snyder 2010).
These numbers include transit time and weather delays. Not accounting transit and quayside
loading, and taking learning curves into account, an expectation of a total of three days per
substructure is assumed. Seeing as jacket structures have mainly been deployed for pilot
projects (Lindø Offshore Renewables Center 2013), resulting in lack of data, assumptions of
24 extra installation hours for jackets relative to monopiles are set. Jacket installations require
piles to be driven into the seabed, and these piles are smaller, but more plenteous than the
number of piles requiring driving operations for monopiles, leading to piling activity
durations sometimes more than 2.5 times those of monopile piling durations (Degraer et al.
2013; Kaiser & Snyder 2010).

Further, a deck capacity of nine monopile substructure components or turbines, and a total of
three hours per lifting operation at quay is assumed. Each monopile substructure consists of a
transition piece in addition to the actual pile, resulting in two quayside lifts required for each
monopile substructure. The fact that monopile substructures consist of two components with
similar outer dimensions, leads to assumptions that the vessel is able to transport nine sub-
structure components, resulting in total transit cost from port to average distance at wind farm
site to be evaluated as evenly distributed between the components, based on transit speeds of
11 knots (MPI Offshore 2011). For simplicity, the physical dimension of jackets and the
presence of smaller piles leads to assumptions that monopiles and jackets may be evaluated
equal with regards to lifting operations and deck capacity. Operational windows are expected
to be 75 % for quayside lifts and transits, and 50 % for offshore installation operations (Myhr
2013).

Based on real-life data from large-scale bottom-fixed projects, an approximate turbine

installation time excluding loading, transit and Waiting on Weather (WoW) is set to 1.2 days,
based on experienced industry record installation times at Thanet Wind Farm and economies
of learning into consideration for industry averages (Kaiser & Snyder 2010; Vestas 2012).
Per-turbine installation costs are based on an assumption that a turbine can be loaded in four
hours. Operational windows are expected to be 80 % for quayside lifts and transits, and 50 %
for offshore lifting installation operations (Myhr 2013).

A number of additional workers apart from crew supplied with the vessel are necessary to
perform certain mechanical and electrical attachment operations. Installation operations are
assumed to require 15 employees working 12-hour shifts, leading to a total of 30 workers
employed per day (DEME 2013), each paid day rates of €2013 370.

86
Expected installation costs per wind turbine for both monopile and jacket substructures are
presented in Table 20 and Table 21, respectively. Please note that these values are mere
estimates for installation costs when using a high-capacity jack-up vessel, and that costs
would be affected by changes in installation time and vessel qualities.

Table 20: Estimated installation costs for monopile wind turbines

Installation
Operation Value Duration Unit cost OW Total cost
operation
Quayside lifts 2.00 0.13 75 % € 65 000
Jack-up Transportation 0.22 0.82 € 196 000 75 % € 48 000
Substructure
installation
Substructure installation 1.00 2.00 50 % € 784 000
Personnel usage 30.0 2.94 € 370 52 % € 61 000
Quayside lifts 1.00 0.17 80 % € 41 000
Jack-up Transportation 0.11 0.82 € 196 000 80 % € 22 000
Turbine
installation
Turbine installation 1.00 1.20 50 % € 470 000
Personnel usage 30.0 2.18 € 370 54 % € 45 000
Total installation cost per wind turbine € 1 492 000

Table 21: Estimated installation costs for jacket wind turbines

Installation
Operation Value Duration Unit cost OW Total cost
Operation
Quayside lifts 2.00 0.13 75 % € 65 000
Jack-up Transportation 0.22 0.82 € 196 000 75 % € 48 000
Substructure
installation
Substructure installation 1.00 3.00 50 % € 1 176 000
Personnel usage 30.0 3.94 € 370 52 % € 84 000
Quayside lifts 1.00 0.17 80 % € 41 000
Jack-up Transportation 0.11 0.82 € 196 000 80 % € 22 000
Turbine
installation
Turbine installation 1.00 1.20 50 % € 470 4000
Personnel usage 30.0 2.18 € 370 54 % € 45 000
Total installation cost per wind turbine € 1 906 000

Additionally, each wind turbine has to be assigned its portion of the total mobilisation costs
for the jack-up vessel, set to four day rates divided by the number of installed wind turbines.
Total wind turbine installation costs for the benchmark monopile wind farm are, given our
assumptions, estimated to approximately €2013 50 million, corresponding to €2013 300 000 per
MW. For the benchmark jacket wind farm, corresponding numbers are approximately €2013
191.4 million and €2013 383 000. Installation costs are assumed to be proportional with wind
farm size with regards to all aspects except mobilisation costs.

The numbers suggest installation of jacket-based wind turbines are expected to be

approximately 28 % more expensive than installation of monopile-based wind turbines,
adding to assumptions that monopile-based farms from an economical point of view are likely
to be preferred over jacket-based farms if site qualities allow them. If depths exceed 30 m,
monopile structures are expected to lose their economical advantage through technical
limitations (Borgen 2010)
87
 3.3.3 Installation of Floating Concepts
Depending on floater concept, floating wind turbines may be installed in a number of proven
or experimental methods. Variables include transport orientation of components such as
towers and floaters, degree of assembly prior to transportation to installation site and whether
components or wind turbines are to be towed or transported on deck of a transportation vessel.

According to Kjartan Melberg, CEO of Norwegian wind turbine installation and O&M
contractor Inwind, turbine manufacturers warn about assembly of tower and nacelle prior to
horizontal transport of turbines. These objections come from the fact that the walls of the
towers are expected to be compromised by the weight of the nacelle (Melberg 2013).
Accordingly, installation strategies based on horizontal transport of joined towers and nacelles
will not be evaluated for this thesis.

Installation Strategies
Two main installation strategies for floating concepts are to be presented, where one is based
on complete installation near-shore before towing the complete wind turbine to site, and one
is based on towing the substructure, with or without the turbine tower attached prior to
towing, to offshore site where turbine components are installed. Both main installation
strategies vary depending on turbine lift strategies, i.e. the number of lifts performed to
completely install the turbine

Towing of Complete, Vertical Wind Turbines

Complete assembly of floating wind turbines in calm waters or onshore (i.e. in a dry dock)
prior to tug transportation to site has been the preferred installation method for operational
pilot turbines as of early 2013. The Hywind pilot turbine was erected and installed as follows
(Statoil ASA 2010):
1. The floater was produced at Technip's yard in Pori at the Southwestern Finnish coast,
before being horizontally towed to the assembly site in Åmøyfjorden near Stavanger,
Norway.
2. The floater was temporarily ballasted using sea water and erected, before being locked
at a crane barge.
3. The floater was permanently ballasted by the crane barge, which collected the olivine
ballast from a supply ship.
4. A second crane barge attached the lower tower part to the floater.
5. The upper tower and the nacelle, pre-assembled on dry land, was collected on dry land
and transported by the second crane barge before being assembled onto the floater.
6. The rotor, pre-assembled on dry land, is accordingly mounted on the nacelle using the
second crane barge.
7. The complete wind turbine was towed to site using an AHTS assisted by two
conventional tug boats in good weather conditions.
8. Three anchors were installed by the AHTS prior to mooring of the wind turbine.

This method removes the need for dangerous, heavy lifts at sea, and as associated with larger
operational windows due to milder weather conditions in protected waters. The method

88
requires near- or onshore cranes for assembly and AHTSs and tug boats for towing and
mooring, and is presented in Figure 70.

Figure 70: Vertical towing of complete wind turbines from shore (left) to site (right)

Quay facilities adapted to quayside installation of turbines onto floaters, e.g. by having drafts
exceeding floater drafts at quay, could lower these installation costs even further by not
having to rely on crane barges, only land-based equipment. Figure 71 shows how
PrinciplePower envision possible large-scale installation of their modest draft WindFloat
concept.

Figure 71: Envisioned large-scale installation of turbines onto WindFloat concept substructures (Weinstein
2009)

89
Transport of Floater or Floater and Tower Configuration
Another possible installation strategy is to tow an adequately sealed floater or a preassembled
floater and tower configuration to site using an AHTS assisted by tug boats. On site, a crane
vessel installs the remaining turbine components, which have been transported to site using a
PSV.

The installation methods are illustrated in Figure 72 and Figure 73, respectively for towing of
floater and preassembled floater and tower configuration. Figure 72 illustrates towing of
floaters, while Figure 73 illustrates towing of integrated floater and tower configurations,
preassembled during production.

Figure 72: Transport of floater from shore (left) to site (right)

Figure 73: Towing of floater and tower configuration from shore (left) to site (right)

Installation Strategy Costs

Here we intend to estimate installation costs for floating substructures and turbines based on
three different installation strategies, each divided into three turbine lift strategies denoted A
to C. After finding installation costs per strategy, each concept is assigned its most
economically favourable strategy.

90
 A set of assumptions on personnel usage, operational windows, transit capacities and speeds
are made:

1. Taking around-the-clock operations into account, a total of 30 personnel who are not
covered by vessel day rates are assumed to participate in the lifting operations, based
on information that approximately 15 additional workers besides vessel crew at all
times assist with mechanical and electrical operations during installation (DEME
2013). These costs are assigned to crane vessel use
2. All quayside turbine lifts are assumed to take two hours, double when lifting complete
turbines. Operational windows are assumed to 75 %
3. Floaters may be launched a number of ways, including lifts, flooding of docks or
sideways launch, and the average costs of these methods are assumed to be equivalent
to one quayside lift lasting two hours, with an operational window of 80 %
4. Up-ending of the floater is assumed to take 12 hours, applying to all concepts except
WindFloat. The operations are handled by assistance vessels, with an assumed
operational window of 60 %
5. The AHTS is expected to sail at different speeds and have different operational
windows based on which installation operation is being performed on which concept,
taking into account that the concepts are expected to differ in weight and stability.
Large weight is expected to negatively affect tow speeds, with the exception of
WindFloat, which is expected to be towed at higher speeds than the different concepts.
High stability is expected to positively affect operational windows, with high values
for WindFloat and Hywind, gradually declining to the most unstable concepts, the
TLB concepts. All assumptions are shown in Table 22, based on correspondence with
(Myhr 2013). Note that Speed indicates towing speed in knots and OW indicates
percentage operational window

Table 22: Concept-depending speeds and operational windows for AHTS vessels

Concept TLB B TLB X3 Hywind WindFloat SWAY

Speed OW Speed OW Speed OW Speed OW Speed OW
Operation
(knots) (%) (knots) (%) (knots) (%) (knots) (%) (knots) (%)
Own transport 15 90 15 90 15 90 15 90 15 90
Towing complete
4.5 45 4.5 45 3 50 5 55 3.5 45
turbines
Towing floater and
5.4 50 5.4 50 4.2 55 6 65
tower configuration 3.9 60
Towing floater 5.9 65 5.9 65 4.6 60 6.5 70

6. The AHTS is expected to be able to tow one complete wind turbine or two floaters or
floater and tower configurations, regardless of concept. All towing operations are
assisted by two tug boats
7. The PSV is assumed to have a transit speed of 18 knots / 33.3 km/h (assumed
operational window 70 %), with an ability to carry three turbines per trip (Raadahl &
Vold 2013)

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 8. Ballast of Hywind, SWAY and WindFloat concepts are expected to last 24 hours,
handled by the near- or offshore crane vessel. Operational windows offshore are set to
60 %
9. Given less harsh conditions operational windows, near-shore operational windows are
amped 20 % in relation to offshore operations
10. Attaching of the floater to the mooring system is assumed to be handled by an AHTS,
taking a total of six hours per line, with an operational window assumed at 55 %
11. The offshore crane vessel is assumed to require four hours of rigging and
transportation between each installation operation, while the corresponding figure for
the near-shore crane barge is two hours. Respective operational windows are assumed
to 65 % and 75 %

Based on data from Oleg Strashnov, the vessel is assumed to be able to perform basic lifting
operations in significant wave heights up to 2.5 m and wind speeds of 17 m/s (Gusto MSC
2012). Accounting only for wave heights, an operational window of approximately 59 % is
expected (Faltinsen 1990). However, the operational window based on wind speeds is
expected to vary depending on turbine installation strategies, e.g. lifting of individual rotor
blades is more demanding than lifting nacelles, as the relation between total area affected by
wind and component weight decreases (Midtsund & Sixtensson 2013). Accordingly, a set of
offshore lift operational windows assumptions are made, based on an expected Weibull
distribution of wind speeds corresponding to an average wind speed equal to that of our
benchmark site, positioned at a generic North Sea site (Bierbooms 2010). The approximate
maximum operational wind speeds and expected operation durations are based on information
from (Midtsund & Sixtensson 2013) and (DEME 2013). Time consumptions are assumed to
include lift mobilisation, and wave height limitations are employed when maximum operation
wind speeds indicate operational windows larger than that from (Faltinsen 1990). These
values are presented in Table 23.

Table 23: Offshore lifting operation qualities

Time Maximum operational Operational

Component lift
consumption wind speed window
Individual rotor blade 4 hrs. 8 m/s 43 %
Assembled rotor 5 hrs. 8 m/s 43 %
Nacelle 4 hrs. 10 m/s 58 %
Tower 6 hrs. 12 m/s 59 %
Complete turbine 12 hrs. 7 m/s 35 %

Based on the different lift times and corresponding operational windows, expected time
consumption and weighted operational window for the three turbine lift strategies are
computed and shown in Table 23. Near-shore lifts are evaluated as equally time-consuming,
but milder weather conditions are taken into consideration through less lenient operational
windows.

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Table 24: Offshore lifting operation time consumption and operational windows

Time
Turbine lift Expected
consumption Weighted
category / Lifting operations actual time
given perfect OW
number of lifts consumption
weather
 Tower
A/5  Nacelle/hub 22 hrs. 49 % 45 hrs.
 Individual blades
 Preassembled
floater and tower
B/4 configuration 16 hrs. 46 % 35 hrs.
 Nacelle/hub
 Individual blades
 Tower
C/3  Nacelle/hub 15 hrs. 52 % 29 hrs.
 Rotor
 Preassembled
floater and tower
D/2 configuration 9 hrs. 48 % 19 hrs.
 Nacelle/hub
 Rotor
E/1  Complete turbine 12 hrs. 35 % 34 hrs.

Based on these turbine lift strategies (strategies A-E) and whether final installation of the
turbine is to be performed near shore (installation strategy 1) or offshore (installation strategy
2), a total of ten installation strategy costs will be evaluated. These are as follows:

 1A: five turbine components lifted onto floater near shore.

 1B: four turbine components lifted onto floater and tower configuration near shore.
 1C: three turbine components lifted onto floater near shore.
 1D: two turbine components lifted onto floater and tower configuration near shore.
 1E: complete turbine lifted onto floater near shore.
 2A: five turbine components lifted onto floater offshore.
 2B: four turbine components lifted onto floater and tower configuration offshore.
 2C: three turbine components lifted onto floater offshore.
 2D: two turbine components lifted onto floater and tower configuration offshore.
 2E: complete turbine lifted onto floater offshore.

Strategy-dependant installation costs

Here, concept installation costs for vertical towing of wind turbines assembled near shore
(Figure 70) will be presented depending on turbine lift categories. Cost calculations are
presented in Digital Appendix 1, while cost discussions are presented in Appendix 9.

Table 25 summarises concept installation costs for the evaluated installation strategies based
on different turbine lift strategies, given our stated assumptions. These costs also include
assigned mobilisation lump sums.

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Table 25: Per wind turbine concept installation cost estimates for the evaluated strategies. All values in €2013

Strategy TLB B / TLB X3 Hywind WindFloat SWAY

1A € 860 000 € 878 000 € 736 000 € 747 0001
1B € 818 000 € 836 000 € 700 000 € 705 000
1C € 799 000 € 817 000 € 681 000 € 686 0001
1D € 768 000 € 786 000 € 644 000 € 655 000
1E € 804 000 € 822 000 € 680 000 € 691 0001
2A € 2 082 000 € 2 825 000 € 2 738 000 € 2 730 0001
2B € 1 952 000 € 2 702 000 € 2 555 000 € 2 585 000
2C € 1 585 000 € 2 328 000 € 2 241 000 € 2 233 0001
2D € 1 308 000 € 2 040 000 € 1 943 000 € 1 925 000
2E € 1 736 000 € 2 479 000 € 2 392 000 € 2 384 0001

1) Debatable due to floater/tower integration of SWAY concept

For the SWAY concept, viability of lift strategies A, C and E are debatable due to the fact that
it is suggested that the concept is designed in such a way that the floater and tower are best
integrated at production, leaving strategies where towers are attached to floaters at sea
discussable.

Table 25 indicates near-shore turbine installation to be preferable to offshore installation for

all concepts, due to the lack of employment of highly expensive offshore crane vessels. As
indicated in the table, a lift strategy of two lifts; nacelle and preassembled rotor positioned
onto a preassembled floater and tower configuration is preferred for all concepts when
evaluating both near-shore and offshore installation, and, accordingly, installation strategy 1D
is chosen for all concepts. The WindFloat (Figure 74) and SWAY concepts seem most
reasonable to tow, due to their stability.

Figure 74: Towing of the WindFloat pilot project (Maciel 2012)

No obvious installation economies of scale beyond allocations of mobilisation costs are

assumed, similar to installation costs for bottom-fixed concepts.

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 3.3.4 Installation of Mooring System
Installation of mooring systems can be dived into pre-set and concurrent installation. In a pre-
set installation, the anchors and mooring lines are pre-laid out and simply hooked up by
supply vessels at the time for installation of the floating structure. This allows for a longer
weather window, limited interaction with the rest of the installation, but will extend the period
of time from installation of the mooring system starts to hook-up of the wind turbines. In a
concurrent installation, the anchors and mooring lines are laid out and installed at the same
time as the floating structure. It is therefore possible that all activities on site can be
performed at the same time, reducing transfers and transports, but will result in many vessels
at site during hook-up. (Eriksson & Kullander 2013)

Installation of a mooring system for a large-scale offshore wind farm would require numerous
operations due to the number of required anchor installations. Adequately installing several
anchors and mooring lines within a limited area would require severe logistical operations
prior to installation to ensure a proper installation process. One possibility to improve
logistics could be to let mooring lines for several wind turbines be connected to a single, high-
capacity anchor, and thus reduce the total number of anchors having to be installed within the
farm (Ekrem 2013). However, logistical operations extend beyond the scope of this thesis,
and will not be discussed profoundly.

To simplify logistical operations during wind turbine installation, mooring systems are
assumed to be installed in a pre-set installation process.

Catenary mooring systems may be installed by only one anchor handling vessel. The shape of
the anchor and the low centre of gravity assure an upright landing on seabed and stability
during penetration. Suction and friction forces will aggravate the retrieval of the anchor, but
the long shank will generate the needed moments to rotate and consequently overcome these
forces, as illustrated in Figure 75 (Vryhof Anchors BV 2010a).

Figure 75: The figure to the left illustrates the DEA in the right loading mode and the figure to the right
illustrates the recovery method (Vryhof Anchors BV 2010c)

The taut leg mooring system can be installed by only one anchor handling vessel. To verify
the right installed position and drag, the length marks on the forerunner and measurement of
the angle between the anchor line and seabed is typically handled by an ROV (Figure 76). To
remove the anchor, the front chains or wires are detached and the anchor is pulled opposite to
the installation direction with a fraction of the installation load (Vryhof Anchors BV 2010b).

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Figure 76: The figure to the left illustrates the verification of the right loading mode and the figure to the right
illustrates the recovery method of the Stevmanta VLA (Vryhof Anchors BV 2010b)

The Stevmanta VLA consists of an anchor fluke and an angle adjuster responsible for
changing the anchor from installation mode to the preferred loading mode. The loading mode
results in an immediate increase of holding capacity of up to 3.5 times the installation load
(Vryhof Anchors BV 2010b).

For suction pipe anchor installation (Figure 77), a pump connected to the top of the pipe
creates a pressure difference which forces the suction anchor into the seabed. After
installation the pump is removed and the anchor is permanently sucked into the seabed. If soil
creep resulting in vertical displacement of the anchor is experienced, the suction pile may be
repositioned to its original position by operating the suction pile pump. For retrieval of the
anchor, the pump is used to counteract the pressure difference to force the suction anchor out
of the soil, making the retrieval process opposite of the installation process.

Figure 77: Left (a): Suction Pipe installation with ROV. Right (b): Pump detached from installed SPA (Jelsoft
2008)

The installation process for all mooring systems evaluated for this thesis is assumed to be
performed by one large AHTS. For offshore applications, requirements for anchor installation
loads to be equal to mooring system design loads exist (Straume 2013), and as of 2013, the
largest AHTS delivers a bollard pull of just shy of 400 tons (Maritimt Magasin 2011).
However, for this thesis we have assumed the indicated day rates for AHTS vessels include

96
capabilities to sufficiently and securely install the discussed mooring systems, either through
future capacity developments for AHTS vessels, through a combination of bollard pulls and
winch systems or through the use of several, smaller vessels cooperating in installing the
anchors. For the taut leg mooring systems, with a holding capacity of approximately 2 000
tons, adequate installation loads are realised both through the installation mode setup of the
anchor, reducing installation loads to roughly a quarter of holding capacities, and the fact that
the excess buoyancy of the TLB concepts may also be utilised to pre-tension the mooring
cables (Myhr 2013).

A set of assumptions have been made in order to estimate costs of the mooring system
installation operations. Please note that these numbers are assumptions for benchmark wind
farms, and that assumption changes with regards to changes in wind farm properties are
presented accordingly.

1. Each DEA anchor is assumed to take approximately 8 hours of installation time. This
includes all deck rigging (operated simultaneously with transit between anchor sites),
launching, lowering of the anchor, seabed penetration and tensioning. VLA anchor
installations are assumed to last 9 hours, slightly longer than DEA anchor installations
due to the fact that VLA anchor installation modes have to be employed and
unemployed. Suction pipe anchors are expected to last 12 hours due to seabed
penetration operations and troublesome deck handling of the anchors due to their size
(Audibert et al. 2003).
2. Increases in water depth are not expected to impact installation times to a great extent,
and accordingly, an increase in installation time of 30 minutes per 100 m of additional
depth is assumed due to extra time for lowering of the mooring system to the seabed
and more troublesome deck handling due to increase in mooring line length (Rem
Gambler 2013). These additions are assumed to be equal for all concepts.
3. A free area, approximately 5 m in length and as wide as the vessel of the utilised
AHTS, has to be reserved for handling of the anchor being installed, leaving the rest
of the deck conservatively exploitable for anchor storage (Figure 78) (Siem Offshore
2013). Assuming a 24 m wide vessel with a deck space area of approximately 750 m2,
approximately 630 m2 may be used for anchor and mooring line storage (Maritimt
Magasin 2011).

Figure 78: Deck area consumption (Vryhof Anchors BV 2010b)

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 Based on anchor dimensions, the AHTS is assumed to have following capacities per
trip:
o Drag Embedded Anchors are estimated to occupy a deck area of approximately
30 m2 (Vryhof Anchors BV 2010a). Taking mooring lines into account, the
AHTS is assumed to be able to carry a baseline amount of 15 mooring
systems, with low and high values at ± 20 %
o Vertical Load Anchors are estimated to occupy a deck area of approximately
30 m2 (Vryhof Anchors BV 2010a). Taking mooring lines into account, a
baseline deck space capacity of 10 anchors is assumed, with low and high
values at ± 20 % (greater outer dimensions on mooring lines than for catenary
mooring systems)
o Suction Pile Anchors capable of deployment for this thesis are expected to
have diameters of approximately 10 m (Tjelta 2013), leading to assumed deck
capabilities of 6 mooring systems, with low and high values at ± 17 %
4. Deck space capacities are assumed to decrease with one unit per 200 m increase in
water depth due to the extra amount of mooring lines having to be stored.
5. Installation operations are expected to be done in significant wave heights up to 2.5 m
(Siem Offshore 2013), giving an approximate operational window of 60 % (assumed
operational window for transit: 75 %) (Faltinsen 1990).

Given the mentioned installation times, capacities and day rates, baseline mooring system
installation costs for one wind turbine of the different concepts deployed at benchmark wind
farm sites are presented in Table 26. Costs include mobilisation costs assigned to each wind
turbine.

Table 26: Mooring system installation cost estimates

Concept TLB B / TLB X3 Hywind WindFloat SWAY

Anchor type VLA DEA DEA SPA
Number of anchors per WT 3 3 4 1
Deck capacity 10 15 15 6
Average transit time per anchor 0.06 0.04 0.04 0.10
OW - transit 75 % 75 % 75 % 75 %
Installation time per anchor 0.38 0.33 0.33 0.50
OW - installation 60 % 60 % 60 % 60 %
Installation costs per mooring system € 64 000 € 55 000 € 55 000 € 88 000
Total mooring installation cost per WT € 192 000 € 167 000 € 222 000 € 88 000

Installation of vertical mooring systems is indicated to be the most expensive operation per
installed system, due to the installation time and deck area consumption, which is high
relative to the two other concepts. However, since SWAY only employs one anchor, this
concept has the lowest mooring installation costs of the discussed, floating concepts, but
when comparing with Table 19, it becomes apparent that the expensive SPA leads to SWAY
having the most expensive mooring costs. Catenary mooring systems have the least expensive
installation process of the evaluated concepts, leading to the lowest and second lowest total
mooring costs for Hywind and WindFloat, respectively, when comparing with Table 19.
Economies of scale due to increases in park size are not expected.

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 3.3.5 Installation of Electrical Infrastructure
This section discusses costs related to installation of export cables, inter-array cables and the
offshore substation. These costs are estimated based on generic sources, and not by using
vessel rates, personnel utilisation and time consumptions.

Export Cable Installation

In order to reduce risks of cable failure due to impact from trawling, ship anchoring etc.,
export cables are buried and embedded in the seabed, which makes trench-digging vessels a
necessity when installing the cable.

Subsea cable installation costs have proven to severely vary, with prices being in the region of
€2013 230 000 - 1 000 000 per km of cable route, these variances come from several variables.
As mentioned, offshore installation costs depend on vessel costs, which in turn may
experience great variance due to supply and demand, fuel costs, utilised combinations of
vessel types and numbers etc. Installation process location relative to suppliers influence
transfer time consumption, and local site seabed conditions will affect if the cable will benefit
from being buried using ploughing, trenching or jetting, the latter an installation method
where cables are buried using water jet streams. Subsequently, cable type, number of cables,
water depth and weather conditions are other factors that influence which approach is
preferred when installing subsea cables. (National Grid 2011)
Cable installation (Figure 79) could be performed relatively quick, with an estimate of 10 km
per day for the cable installation and somewhat slower burial of the cable. (Notman 2012)

Figure 79: Cable installation by Stemat Spirit at London Array (London Array 2013)

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As discussed in section 3.2.4 and Appendix 7, the most reasonable solution for our
benchmark farms with regards to capital costs and costs of losses through dissipated ohmic
losses and farm downtime is expected to be installation of one single cable, leaving
installation costs substantially more reasonable than installation of two cables (National Grid
2011). National Grid (2011) estimates the installation costs of individual, trenched cable to
€2013 354 000 - 826 000 per km of cable route (National Grid 2011), corresponding to baseline
installation costs of €2013 118 million for the benchmark farms. Economies of scale due to
increasing offshore distances are not expected.

Inter-array Cable Installation

Inter-array cable installation is expected to be substantially less expensive than export cable
installation due to physical properties of the cables, with estimated per km costs approxi-
mately one third of export cable installation costs (Douglas Westwood 2010). This
corresponds to baseline installation costs of approximately €2013 36.4 million for the near 192
km of inter-array cable in our benchmark farm. Low and high scenarios are set to ± 10 %.

Offshore substation installation

As presented in Appendix 8, total baseline costs related to installation of substations (Figure
80) for the benchmark wind farms are estimated to approximately € 2013 23.8 million for
bottom-fixed concepts and €2013 18.6 million for floating concepts, estimated from installation
costs associated with jacket-based wind turbines and WindFloat concept wind turbines.

Figure 80: Offshore substation installation by Rambiz at London Array (Mercator Media 2013)

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 3.4 Operation and Maintenance
Annual costs related to Operation and Maintenance of the wind farm, hereby denoted O&M
costs, are key when finding life cycle costs for a wind farm. Annual O&M costs for generic,
offshore wind farms have been estimated by several reliable and independent sources, based
on bottom-fixed farms. However, these estimates are based on assumptions that the wind
farms are positioned severely closer to shore than the benchmark wind farms defined for this
thesis, potentially leading to substantially higher reliabilities and lower O&M costs from
easier site access and less harsh weather conditions.

For this thesis, O&M cost increments influenced by increasing offshore distances and water
depths will be taken into consideration when annual O&M costs are estimated. This will be
done using specialised software developed by the Energy Research Centre of the Netherlands,
presented in section 3.4.2.

3.4.1 Maintenance
Maintenance actions comprise of several actions intended to maintain the technical state of
the wind farm as close to perfect as possible. Actions include removal of damaged parts,
exchange of parts, addition of a new part, changes or adjustment of settings, software updates
and lubrication or cleaning processes.

Predicting when and where the failures will occur are nearly impossible, but statistics show to
some extent that component failure rates follow a particular pattern. The so-called bathtub
curve is widely used in reliability engineering, and Figure 81 shows this particular form,
describing a simplification of expected failure frequency distributions over a component's life
time, comprising of three main periods (Ding 2010):
1. Burn-in period: The period where failure rates are high, but decreasing, due to troubles
at the beginning stage.
2. Useful life period: The period where failure rates remain constant for a certain time.
3. Wear-out period: The period where failure rates start to increase, indicating aging or
wear-out effect.

Figure 81: Bathtub curve (Ding 2010).

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O&M operation requirements and connected costs are expected to vary according to the
bathtub curve over the life time of a real-life wind farm. However, for this thesis, O&M costs
are calculated as averaged, annual costs, as the offshore wind industry is not yet mature
enough to provide accurate data as to how component-specific bathtub data are expected to
vary.

Maintenance Strategy
At a general level, maintenance can be subdivided into preventive and corrective
maintenance, or a combination between both. Preventive maintenance is performed in order to
prevent a component or system from not fulfilling its design purpose, while corrective
maintenance is performed in order to replace or repair a component or system that does not
fulfil its design purpose anymore. For this thesis, the following categories for maintenance
seems appropriate, as illustrated in Figure 82 (Braam et al. 2007):
 Calendar based preventive maintenance: a maintenance method that initiates
service and repair of a wind turbine based on fixed time intervals or a fixed number of
operating hours, and is independent of the operating status.
 Condition based preventive maintenance and planned corrective maintenance:
maintenance methods that initiate service and repair of a wind turbine once wear
levels have exceeded set limits, and are therefore based on the actual health of the
system. It is identified by inspection and/or by other surveillance techniques such as
sensors and different types of analyses. Condition based preventive maintenance is
foreseen in the design (predicted), but not in advance when the maintenance has to be
carried out, while planned corrective maintenance is not foreseen at all (the component
does not work properly but fulfils the system demand).
 Unplanned corrective maintenance: a maintenance method that initiates service and
repair of a wind turbine based on an unexpected failure of a component, where the
component does not work and is not able to fulfil its task anymore. It aims at returning
the component to functional state, either by repairing or replacing the component.

Maintenance

Condition Based Preventive

Calendar Based Unplanned Corrective
Maintenance / Planned
Preventive Maintenance Maintenance
Corrective Maintenance

Figure 82: Schematic overview of the maintenance strategy

These categories can be split up further depending on level of detail. In this thesis, we
distinguish between minor and major maintenance operations based on the size of components
needed for repair, and accordingly, the vessels used. This will be further discussed in section
3.4.2. Figure 83 illustrates the relationship between the different maintenance types and Table
27 summarise the advantages and disadvantages of the different maintenance types.

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Figure 83: Simplified schematic overview of how the maintenance effort over the lifetime of an offshore wind
farm can look like (Braam et al. 2007).

Calendar based maintenance is usually performed one or two times per year, and the costs can
be somewhat higher occasionally, e.g. due to oil change in the gearbox. It is more difficult to
predict how often unplanned corrective maintenance is performed due to the fact that random
failures can happen at all times, but the costs can be somewhat higher than expected due to
troubles at the beginning stage. Condition based/planned corrective maintenance is carried out
when it is necessary for a major overhaul, due to unexpected wear out of components
designed for the lifetime of the project (e.g. replacement of gearboxes or pitch drives). When
this type of maintenance has to be carried out during lifetime of the project, it will generally
be planned, but does not need to be foreseen initially. (Braam et al. 2007)

Calendar and condition based maintenance can be planned in advance, and therefore the
associated costs and downtimes can be determined relatively easy with small uncertainties.
For unplanned corrective maintenance the associated costs are much more difficult to predict
and are determined with large uncertainties.

(Ding 2010) proposes a combined strategy called opportunistic maintenance. In opportunistic

maintenance, the unplanned corrective maintenance performed on failed components can be
combined with preventive maintenance carried out on other components. This should be a
considerable strategy because there are multiple turbines in the wind farm and the turbine has
multiple components. Furthermore, when a down time opportunity has been created by the
failed component, the maintenance team may perform preventive maintenance on other
components the same time and save substantial cost compared to separate maintenance. (Ding
2010)

From an economic perspective, we can therefore assume it is wise to carry out preventive
maintenance on other components when a bigger maintenance operation is performed on a
wind turbine.

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Table 27: Advantages and disadvantages of the different maintenance types (Ding 2010)

Maintenance type Advantages Disadvantages

- Easy logistics. - Components won’t be used for a
Calendar Based - Shorter downtime and higher maximum lifetime.
Preventive availability. - Cumulative fixed cost is higher
Maintenance - Maintenance activities can be well compared to corrective maintenance
scheduled. due to more frequent set out.
Condition Based - Components will be used the most - High investment and effort on
Preventive efficiently. reliable monitoring system.
Maintenance / - Downtime is low and availability is - Not a mature application in wind
Planned high. industry.
Corrective - Easy logistics due to a failure can be - Difficult to identify appropriate
Maintenance predicted in time and well scheduled condition threshold values.
- Components will be used for a - High risk in catastrophic damage
Unplanned maximum lifetime. and long down time.
Corrective - Lower investment on monitoring - Spare parts and logistics allocation
Maintenance component. is complicated.
- Likely long lead time for repair.

Maintenance Optimisation
To determine the most cost effective maintenance strategy, we need to optimise the
maintenance strategy to provide the best balance between direct maintenance costs, e.g.
labour, resources and materials costs, and the consequences of not performing maintenance as
required, e.g. loss of production and the potential for greater damage on the wind turbines.
Carrying out preventive maintenance every year, or even more often, would prevent most of
the failure from happening, but may result in more direct costs. In contrast, less frequent
maintenance may reduce the costs and elevate the risks. Maintenance will also be affected by
the weather and sea state and the wind turbine may be inaccessible for longer periods.
Optimising the interaction between these factors may eventually determine the optimum level
with the lowest total maintenance costs. (Ding 2010)

Figure 84 shows a simplified optimisation example to determine the optimal balance between
direct maintenance costs and the consequences of not performing maintenance as required.

Figure 84: Optimal number of failures allowed (Ding 2010).

In order to focus on the topic of this thesis, we will not develop models for optimising the
maintenance strategy. Instead, will we use available data and information and make
simplifications to determine the total maintenance costs, discussed in section 3.4.2.

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 3.4.2 Operation and Maintenance Modelling
To estimate the O&M costs and downtime in the operational phase of the wind farm, we have
used the OMCE-Calculator, introduced in section 1.5.4. The OMCE-Calculator contains a
default maintenance model, which has been used as a starting point for our analysis. This
model does not represent an existing wind farm and the data presented in the model (amongst
others failure data, equipment capabilities and costs, repair strategies and wind turbine
specifications) are estimates based on previous experiences and engineering judgement by
ECN. In reality, such values are expected to be highly site- and time-specific. Accordingly, if
the OMCE-Calculator were to be used to predict O&M costs for a real-life wind farm, the
calculator would have to be extended with site- and time-specific values. However, the data
are considered good estimates for our analysis of a fictitious wind farm positioned at a generic
site, but we have still supplemented with own data that is applicable to our analysis.

The OMCE-Calculator has been used to analyse our benchmark wind farm consisting of 100
wind turbines (500 MW) that will be in operation for 20 years. Built-in, default meteorological
data from the North Sea has been used as grounds for the analysis. The benchmark distance to
the farm is set to be 200 km from the nearest harbour. The wind farm is connected to the grid
via one substation.

For this thesis, it is chosen to distinguish between floating and bottom-fixed farms, as
different vessel types for certain maintenance operations may be employed for the two farm
categories. Investigated substructure concepts, whether floating or bottom-fixed, are regarded
not to differentiate O&M operations and costs further.

When evaluating energy cost changes with changes in certain parameters, we aim to present
how changes in variables, such as distance to shore and heavy maintenance vessel types, are
assumed to affect the total O&M costs.

Maintenance Operation Overview

The repair costs and efforts of all the different failures that can occur are not equal, meaning
that the model can handle that a specific component may fail in various modes. The individual
types of faults are modelled based on the default model developed by ECN. The spare parts
are divided in different components which have different size, cost, availability and order
time. The different repair categories are determined by the maintenance type and the
corresponding amount of work, required equipment and time to organise for each
maintenance phase. The OMCE-Calculator is considering both preventive (calendar and
condition based) and corrective maintenance, as described in section 3.4.1.

Calendar Based Preventive Maintenance

All wind turbines in the wind farm are scheduled to be maintained annually with a
maintenance crew of three technicians and an average repair time of 24 hours. This operation
is expected to be performed by small specialised maintenance vessels, as shown in Figure 85.
In addition, a larger preventive maintenance campaign is carried out every ten years which
require double maintenance crew and repair time. Since the wind farm consists of floating
structures that is connected to the mooring system, an underwater inspection is required for

105
each wind turbine every year. This preventive maintenance operation requires a diving
support vessel with divers and diving equipment and is assumed to take about three hours per
turbine. Inspection of the substation is assumed to take 50 hours every year. The preventive
maintenance operations are planned in advance and are scheduled for the period of May –
September each year, a period with higher expected accessibility due to calmer weather.

Figure 85: Maintenance operation with the FOB SWATH 1 at Greater Gabbard (Odfjell Wind AS 2012)

Condition Based Preventive Maintenance and Planned Corrective Maintenance

Some smaller components in the wind turbine are expected to have a predictable wear pattern
and is expected to be replaced the year before a failure is expected to occur. A smaller
replacement is expected to take eight hours with a crew of three technicians, while a bigger
replacement will require double maintenance crew and repair time. The actual components
that follow this type of wear pattern are modelled in the default model in the OMCE-
Calculator. Based on the expected time to failure, condition based maintenance is modelled to
be performed by next year in the period from May – June.

Unplanned Corrective Maintenance

For simplicity, all operations are expected to be performed on site, although detaching wind
turbines from mooring systems prior to towing to shore could be a feasible solution for most
of the concepts and will be discussed accordingly. The OMCE-Calculator differentiates
between minor and major unplanned maintenance operations. Minor unplanned maintenance
operations are assumed to be operations from malfunctions on electrical or other small
equipment, which can be carried out without the use of a crane vessel. Major unplanned
maintenance operations are assumed to be operations from malfunctions on larger equipment,
where repairs have to be completed with assistance from a crane vessel. The different repair
operations are assumed to take between four and 48 hours with a crew size between three and
six technicians. The repair time and crew size, as well as the different vessels that are
required, are depending on the scope of the work that has to be carried out.

The OMCE-Calculator uses generic reliability data that are derived from the results of the
Reliawind project (Hendriks & Wilkinson 2011). The failure frequencies per wind turbine
component from the Reliawind report includes data of approximately 350 onshore wind

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turbines and represent the most recent publicly available information on failure rates of large
wind turbines. The default model of the OMEC-Calculator uses a wind turbine breakdown
based on breakdown of main systems for a 4 MW Direct Drive turbine. For our generic 5 MW
double-fed, asynchronous turbine, we assume breakdown to be similar, and more accurate
reliability data for this type of turbine is not available for us at the moment. The main turbine
specifications of the analysed wind turbine are described in Table 5 and the associated power
curve data is presented in Figure 31. In addition to the wind turbine failures, BOP (Balance of
Plant) failures are also taken into account, representing failures in the substation, subsea
cables and substructures. These are assumed equal for floating and bottom-fixed concepts.

The failure rates on the subsea cables are based on assumptions that typical failures rates for
subsea cable are 0.1 per 100 km per year (National Grid 2011). It is unclear if this rate is
applicable for both the export cable and the inter-array cable. The export cable may be
exposed for trawling and anchoring impacts, while the inter-array cables may be exposed for
impact from large installation and maintenance vessels. At the same time, the cables have
different voltage and this might lead to different failure behaviour. With little literature on this
topic, the failure rate on the export cable and inter-array cables is assumes to be equal, and is
set to 0.1 annual failures per 100 km of cable for this thesis. For the export cable with the
length of 200 km for our benchmark farm, the failure rate is assumed to be 0.2 per year. The
inter-array cables in our benchmark farm are deployed with five wind turbines per row and a
total of 20 rows (Figure 63). The total length of the inter-array cables is approximately 190
km, giving a failure rate of approximately 0.19. The average availability for the wind farm if a
failure occurs is assumed to be 97 % for the inter-array cables and 0 % for the export cable.

Note that the OMCE-Calculator implements opportunity-based maintenance strategies, and

thus seeks to allocate mobilisation costs for external vessels over several turbines and several
maintenance operations if simulations indicate this as a possibility.

Accommodation and Port Facilities

Traditionally, work boats have been used to transport technicians to and from site for O&M
purposes, which is highly dependent on the weather window. Given the offshore distance
from the nearest harbour to the proposed wind farm (> 100 km), offshore accommodation
seems most feasible, supported by calculations shown in section 3.4.3. Offshore
accommodation could be achieved through an on-site living and maintenance platform.
(Multiconsult 2012) indicate that a living platform may be a relevant solution for wind farms
located more than 20 km from shore, while the corresponding distance according to (European
Wind Energy Association 2011) is indicated to exceed 50 km.

One approach for offshore accommodation could be to combine the accommodation platform
with the offshore substation. However, living in close proximity to high voltage equipment
may offer numerous issues regarding health and safety. Another approach is to introduce the
use of a so-called mother vessel. A mother vessel is a large floating vessel permanently
located in the vicinity of the wind farm, offering accommodation for technicians. The size of
the mother vessel not only allows the technicians to live close to the farm for extended
periods of time, but it is also capable of operating in rougher sea condition and provide

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sufficient deck and storage space for small components. Additionally, the mother vessel has
the ability to deploy multiple smaller maintenance vessels that could transfer the technicians
to the wind turbines. In this manner, time available for maintenance can be maximised by
significantly reducing transit time for technicians. (European Wind Energy Association 2011)

For this thesis, it is assumed that a mother vessel is deployed and used throughout the
operational phase of the wind farm. Further we assume that the mother vessel is capable of
storing small components, while larger components are not kept in stock on the mother vessel.
A gangway system (Figure 86) from the mother vessel to the wind turbines is expected to be
included in the mother vessel, enabling access in severe sea states.

Figure 86: Gangway system for mother vessel (SeaEnergy PLC 2012)

The gangway system may provide safe wind turbine access for technicians in significant wave
heights up to 4 m (SeaEnergy PLC 2012). The cost of a mother vessel is discussed in section
2.3.2 and the baseline cost for this analysis is therefore set to be €2013 13.1 million per year. It
is assumed that the mother vessel cost includes all crew costs related to operating the vessel,
including both marine, medical, hygienical and catering crew (Kjærstad 2013).

In addition to the mother vessel, we assume the need for port facilities. (The Crown Estate
2010) estimates a O&M port to cost €2013 6.3 million per year and (Scottish Enterprise 2011)
estimates the cost to be €2013 2.4 million per year. The size of the O&M port will be reduced
by using a mother vessel, and we assume the cost for an O&M port to be approximately €2013
2.3 million per year. High and low scenarios are set to ± 11 %. The O&M port is assumed to
include (The Crown Estate 2010):

1. Administration facilities and operation rooms, with a control room manned around the
clock to monitor the status of the wind turbines and initiate necessary maintenance
operations. The operators also need remote land support, such as specific engineering
advice, information and support.

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 2. Lifting equipment to move components from the harbour to the vessels that will carry
out a maintenance operation
3. Workshop areas with equipment and tool storage
4. Fuel bunker to store fuel for helicopters and vessels
5. Good connection to the public road network

Personnel
It is expected that the wind farm will both administrative and technical personnel. The
technicians will only work in a single shift during daylight periods to ensure a safe
environment. Offshore personnel are assumed to work on shifts lasting 12 hours, from 6:00
am to 6:00 pm, and maintenance will only be initiated if technicians can spend a minimum of
two hours to the repair onsite. All year long two crews of technicians are employed, who are
exchanged from the mother vessel on a 2-week basis. A total number of 60 technicians and
two managers for the two crews are assumed to be employed on a fixed contract basis. For
condition based maintenance, additional crew is hired for periods when this type of
maintenance is performed. This crew is assumed to be paid with a rate of € 70 per hour, which
is substantially more than the hour equivalent of the technicians employed on a permanent
basis, as these hired crew members are hired from contractors on shorter contracts.

It is also expected that the wind farm needs operational personnel onshore, and a total of six
administrative personnel and three technicians are assumed for the benchmark farms.

In a real-life scenario, it could be expected that personnel performing similar tasks may have
different labour costs from seniorities, responsibilities etc. Additionally, personnel employed
within the same sectors defined for the thesis are expected to perform tasks varying in
complexity and costs, e.g. workers employed as onshore administrative personnel are likely to
have different wages based on whether they perform managing or logistical operations etc.
Accordingly, labour costs for different categories are estimated as averages over the sector.
The offshore technician and manager cost estimates are based on UK sector offshore wind
energy salaries (Earth Wind & Hire 2013), and adjusted according to assumptions that the
relation between direct and indirect labour costs are set equal to that of Norwegian oil and gas
industry, with total costs at 140 % of direct salary costs (Statistics Norway 2010). Other
sectors are estimated based on these values. Total annual labour costs for the different sectors
are presented in Table 28.

Table 28: Fixed annual labour costs for the benchmark farms

Total
Fixed annual
Labour Employees annual
contract cost
fixed costs
Offshore O&M technicians 60 € 67 000 € 4 020 000
Offshore O&M managers 2 € 118 000 € 236 000
Onshore O&M administrative
6 € 60 000 € 360 000
personnel
Onshore technical personnel 3 $ 50 000 $ 150 000
Total annual labour costs 82 - € 4 766 000

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Vessel and Equipment Requirements
To maintain the offshore wind farm, the following vessel and equipment are used for the
transfer of personnel and spare parts, and for hoisting components:
1. Workboats will be launched from the mother vessel when corrective and preventive
maintenance has to be carried out without use of the gangway system, and transports
the service technicians to and from the wind turbines. The average travel time is set to
one hour. The workboat is also able to transport small parts (up to two tons) from the
mother vessel to the wind turbines. For this analyse it is assumed to permanently
employ two specialised maintenance vessel on a fixed contract, designed to cope with
harsh weather conditions, as described in section 2.3.2. Additional vessels are
chartered to perform condition based maintenance when required
2. For the replacement of larger components (weights in excess of two tons), a larger
vessel is chartered on the spot market. For analysing the O&M costs for a bottom-
fixed wind farm, a jack-up vessel will be deployed, and for floating wind farms, a
floating crane vessel will be evaluated. Large components will not be stored on the
mother vessel, and will be specifically ordered and transported to the harbour to be
picked up by the crane vessel. For the replacement of the larger components,
workboat will assist the operation and transport the technicians
3. To repair or replace power cables in the wind farm, a cable laying vessel is chartered
on the spot market. For preventive maintenance of the cables, a diving support ship
with a crew of divers or ROVs is used, depending on maintenance depth and
operations
4. For underwater inspections and repairs on the substructures or mooring system, a
diving support vessel is chartered on the spot market
5. One helicopter is chartered to transport technicians when required
6. Each turbine in the wind farm is equipped with internal cranes, one inside the nacelle
and one on the docking platform, capable of lifting small components (up to 2 tons)

The fixed annual cost for the specialised maintenance vessel is assumed to have a unit
baseline price of €2013 1.9 million per year. Day rates for vessels performing major turbine
repairs are volatile and will represent uncertainties to the total estimated O&M costs. These
repairs are expected to be performed with vessels of lower specifications than those used for
installation purposes (European Wind Energy Association 2011). Since the crane vessel only
needs a lifting capacity of about 100 tons to carry out a maintenance operation, the day rates
for the crane vessel are assumed to be lower compared to the rates discussed in section 2.3.2.
For this analysis, the day rates for the jack-up and crane vessels are set to be €2013 196 000 and
€2013 300 000, respectively. Day rates are expected to be somewhat lower when WoW, and
these are set to 75 % of the mentioned day rates for simulation purposes. Mobilisation is
expected to take one month for larger replacement vessels, and mobilisation costs are set
equal to four complete day rates.

The remaining cost elements, and other factors relevant for estimating O&M costs not
mentioned in this section come from the OMCE-Calculator default model, and will not be
presented due to their confidential nature.

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 3.4.3 Operation and Maintenance Costs
Based on the assumptions made in section 3.4.2, the OMCE-Calculator has been used to
estimate the O&M costs and downtime in the operational phase of the wind farm, by
performing 50 separate simulations for each of the discussed wind farm qualities. These
figures are presented in this section, while costs associated with changes in farm size and
offshore distances are presented in Appendix 10.

Table 29 shows the average number of maintenance events per year and indicates that most
events are unplanned. Condition-based maintenance numbers are based on one operation
performed annually and one operation performed every five years for each wind turbine

Table 29: Number of maintenance events per year averaged over wind farm life cycles

Number of maintenance events per year Floating Bottom-fixed

Unplanned corrective 872 870
Condition-based 4 4
Calendar-based 120 120
Total maintenance events 996 994

The indicated number of maintenance events for the bottom-fixed wind farm simulation is
slightly smaller than the floating wind farm simulation. These differences only come from
simulation differences and should be considered equal. The low value for condition-based
maintenance comes from the fact that such operations are modelled as a total of 75 different
operations (underwater inspections, blade adjustments, yaw gearbox maintenance and found-
ation maintenance), performed once over the 20 years of lifetime.

Table 30 shows the simulated downtime per year. This downtime is presented as the total
downtime over all turbines.

Table 30: Total downtime per year

Total downtime per year Floating Bottom-fixed

Unplanned corrective (h) 50 667 54 655
Condition-based (h) 55 55
Calendar-based (h) 3 360 3 360
Total downtime (h) 54 082 58 070
Availability (time) 93.8 % 93.4 %
Loss of production per year (MWh) 143 621 155 585

As indicated, unplanned corrective maintenance account for majorities of the wind farm
downtime, while condition-based only stand for a minuscule percentage of the wind farm
downtime. This is because condition-based maintenance is usually performed in a way where
turbines do not have to be shut down. The downtime due to calendar-based maintenance is
also expected to be low compared to unplanned corrective maintenance, both because these
operations are performed quicker and because shut-down of turbines can be foreseen and
planned with calendar-based maintenance.

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As for number of incidents, the downtime difference between floating and bottom-fixed farms
is expected to come from simulations, and should be considered equal.

Average availabilities are estimated at between 93 % and 94 %, corresponding to assumptions

in section 2.2.3 that availabilities are expected slightly lower than those indicated by generic
sources for wind farms positioned closer to shore, at 95 % to 98 %. Figure 87 shows average
availabilities for the floating benchmark farm on a monthly basis, indicating lower
availabilities in summer months than other parts of the year, which at first may seem
somewhat contradictory, but these availabilities come from the distribution of calendar-based
maintenance periods.

Figure 87: Average wind farm availability per month

Table 31 shows the simulated O&M costs for the investigated benchmark wind farm types.

Table 31: O&M costs per year

Cost of repair per year Floating Bottom-fixed

Material costs
Unplanned corrective € 5 372 000 € 5 381 000
Condition-based € 131 000 € 131 000
Calendar-based € 1 600 000 € 1 600 000
Labour costs
Unplanned corrective and calendar-based € 4 766 000 € 4 766 000
Condition-based € 32 000 € 32 000
Equipment costs
Unplanned corrective and calendar-based € 42 888 000 € 35 165 000
Condition-based € 1 490 000 € 1 456 000
Total costs of repair per year € 56 280 000 € 48 532 000

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The table suggests annual O&M costs for floating wind farms are approximately € 2013 7.7
million higher than for bottom-fixed parks. This cost difference is almost solely accredited to
day rate differences of jack-up vessels and crane vessels, while simulation imperfections may
account for a certain variance. As indicated, material costs for both floating and bottom-fixed
farms are simulated to be almost equal, and as is condition-based labour costs and condition-
based equipment costs. Labour costs besides costs attributed to condition-based labour are
fixed costs indicated in section 3.4.2.

Equipment costs are all costs associated with vessel utilisation. Of the Unplanned corrective
and calendar-based equipment costs, approximately €2013 16.9 million are fixed costs coming
from the mother vessel and two specialised maintenance vessels, while the remaining costs
come from simulations of employed external vessels.

The total O&M costs are graphically presented in Figure 88. This breakdown is gathered from
the benchmark floating wind farm, and shows that equipment costs account for majorities of
the total O&M costs of the wind farm at rates of more than three quarters.

Figure 88: Breakdown of O&M costs

This cost distribution may seem to be somewhat offset from O&M cost breakdowns from
other sources, such as (Renewables Advisory Board 2010), where labour is indicated to
account for roughly 35 % of annual OPEX, materials for roughly 14 % and Other costs for
approximately 52 %. However, it must be emphasised that this thesis considers O&M costs
from the perspective of a wind farm operator, keeping labour costs associated with vessel
crews out of the picture, unlike most generic sources. However, cost breakdowns are
supported by both (Renewables Advisory Board 2010) with regards to material cost
percentages, and (Douglas Westwood 2010; Scottish Enterprise 2011) with regards to cost
percentages associated with wind farm technicians, respectively at 14 % and 8 %.

The equipment cost distributions are further evaluated in Figure 89, where equipment costs
for the benchmark floating wind farms are further divided into five categories.
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Figure 89: Equipment cost breakdown

As indicated, costs related to rent of external vessels to help with unplanned corrective
maintenance (blue) account for nearly half of the annual equipment costs, while costs
associated with the mother vessel (green) accounts for the majority of the remaining costs.

The vessel day rates are highly market dependent. The O&M costs for a floating wind farm in
Table 31 is based on day rates of €2013 300 000 for the crane vessel. If we assume higher
demand of crane vessels, resulting in crane vessel day rates of €2013 531 000 (assumption of
section 2.3.2), the total O&M costs are expected to increase approximately 28 %, giving total
costs of €2013 72.2 million. Based on the demand and farm size, it may be profitable to buy
own vessels, and one feasible scenario could be to integrate the crane vessel and mother
vessel. (Multiconsult 2012) indicate acquisition of a purpose built heavy lift vessel for both
installation and O&M purposes feasible for farms in excess of 100 units. However,
acquisition of larger integrated installation and O&M vessels are not evaluated in this thesis.

It cannot be foreseen whether crane vessels will be available within a realistic period. In case
of a bigger unplanned turbine maintenance on floating concepts, where it is necessary to use a
crane vessel, another approach could be to use AHTS and tug vessels to tow the complete
wind turbines back to shore where a crane barge employs adequate maintenance operations.
Annual O&M costs associated with this maintenance strategy, which may be regarded as
opposite to the wind turbine installation process, are estimated to approximately € 2013 57.6
million through simplified simulations using the OMCE-Calculator, as presented in Appendix
10. The simplified approach could be summarised through stating that per-trip costs related to
the entire towing operations are estimated to just shy of €2013 2 million, from cost, time and
weather assumptions presented in section 3.3.3 and Appendix 10, and letting the OMCE-
Calculator assign these values depending on reliability data. Even though this approach is
only assumed to be marginally more expensive than use of crane vessels with day rates of
€2013 300 000, operations are assumed to last so long availabilities drop from near 94 % to shy

114
of 92 %. The main reason for these added expenses comes from the fact that with use of
AHTS and tug vessels, opportunistic maintenance may not be employed to the same extent as
when utilising crane vessels at site. However, the simplified approach used to estimate these
costs through the OMCE-Calculator may take into account some clustering of maintenance
operations, leading to the estimates to possibly be somewhat liberal. Since the estimates are
not further employed, this is disregarded. Other uncertainties come from the fact that costs
related to waiting on weather are calculated outside of the model, so the OMCE-Calculator
does not deploy its built-in weather data.

As indicated, towing of turbines back to shore does not seem like the most feasible solution
for larger maintenance operations, given the assumptions presented when estimating annual
O&M costs. However, the approach suggests that if a market situation indicating more
expensive crane vessels were to occur, a different strategy for larger maintenance operations
could be deployed without affecting O&M costs too severely. With reduced offshore
distances, contributions from time related to towing, and accordingly, costs, would be
reduced. However, time and costs from detaching and attaching the wind turbines to the
mooring systems remain constant with distance, and introductions of towing as the main
maintenance strategy is not regarded when evaluating energy cost impacts depending on
offshore distance.

In addition to evaluating costs related to towing of wind turbines for larger maintenance,
simulations have been run to evaluate costs if no mother vessel is deployed for the benchmark
wind farms, and maintenance operations are performed by transporting technicians from shore
in specialised maintenance vessels. These calculations, shown in Appendix 10, indicate
annual O&M costs of approximately €2013 55.7 million, somewhat less than with use of a
mother vessel. However, availabilities drop by nearly three percent, indicating lower
electricity production and higher costs of energy. The costs saved by omitting the mother
vessel from the O&M cost calculations are almost counteracted by costs assigned to external
vessels through waiting for assistance from technicians who are highly dependent on merciful
weather. Additionally, the method is associated with long travel times and severe strain on
human labour, leading to assumptions that this should not be a recommended maintenance
strategy for severe offshore distances.

Operations Phase Insurance

Insurance is essential in the operational phase of an offshore wind project and provides
comfort to all potential investors, making it easier to attract capital as well as lowering costs
in the long run. The operations phase insurance provides financial protection from physical
damage and delays during the operational stage of a project, such as substation outages,
design faults and collision risk (PricewaterhouseCoopers 2012). Appendix 11 shows a typical
insurance package covering the entire operation period. This package is expected to cost
around €2013 15 000 - 20 000 per MW per year, typically renegotiated on an annual basis,
adding up to €2013 7.5 - 10 million annually for a 500 MW offshore wind farm. Adding
insurance costs to O&M costs gives annual OPEX costs. (PricewaterhouseCoopers 2012)

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 3.5 Decommissioning
When the wind turbines have reached the end of their design life, removal and
decommissioning of selected components would take place. This includes the wind turbines,
floaters and transition pieces, subsea cables and substation. Planning the work and design of
any additional equipment that would be required is performed under the development and
consenting phase. The practice for decommissioning may vary between countries, but for
most countries the plan for this phase must be approved before the offshore installation
begins. In this thesis, we assume a similar process for decommissioning of the wind turbines
as in (BVG Associates 2012). Decommissioning is assumed to be a reverse assembly process
to installation, which will take approximately one year for a generic 500 MW wind farm (The
Crown Estate 2012). The cables will be cut off at a depth below seabed and most of the cables
will not be pulled up. All other infrastructure will be removed and transported back to shore,
sorted for recycling and delivered as scrap metal (Figure 90). There may be some residual
value attached to the wind farm which could be sold and reused, e.g. reusing substructures by
replacing turbines. However, the residual value is not considered for this thesis. Further
environmental work and monitoring will be conducted after completing the decommissioning.

Figure 90: The life cycle of a wind turbine, derived from (The World Steel Association 2012)

When the selected components have arrived to shore the material that will be scrapped have to
be cut into suitable length and weights to be transportable by truck and sizes accepted by the
steel mills which receive the metal. The cost for cutting tubular steel is determined by the
local steel mill and is depending on the cutting method, the complexity of the cut and the steel
thickness. The cost for processing the metal and transporting the material from shore to the
local steel mill facilities will not be considered in this thesis, since it is depending on many
variables and the costs are small relative to the other decommissioning costs.

116
A great uncertainty exists in terms of the decommissioning costs for offshore wind farms, and
even for onshore wind turbines uncertainties exist due to the fact that few wind turbines have
approached end of useful lifetime. At the same time, it is assumed that the decommissioning
costs for onshore wind turbine are minimal, considering the return value from scrap metal
(Multiconsult 2012). For offshore wind turbines, the decommissioning costs will be greater
because of the demanding reverse assembly process to installation in open water and the costs
related to transporting the remaining infrastructure back to shore.

It is assumed that decommissioning of the wind turbines, grid and electrical equipment
requires less focus on accuracy and cautiousness than what is the case in the installation
phase, simply because any damage on the components will not matter due to the fact that they
are to be recycled or scrapped. Less lenient operation requirements may lead to quicker and
cheaper decommissioning. Note that caution with regards to labour safety and vessel integrity
are assumed to be adequately maintained throughout the entire life cycle of the wind farm.

(BVG Associates 2012) estimates the average cost of decommissioning of a wind farm to be
65 % of the installation cost. Table 32 shows the assumed decommissioning costs as a
percentage of the related installation costs. The removal of the complete wind turbine is
assumed to take more time for the bottom-fixed concepts compared to the floating concepts.
The removal of the subsea cables will only take 10 % of the time taken to lay, since most of
the cables will not be pulled up as discussed earlier. The removal of the substation is assumed
to take 90 % of the time taken to install the substation, similar to the decommissioning of the
support structure. The same percentage is assumed for removal of mooring system.

Table 32: Decommissioning costs as a percentage of the related installation costs

Percentage of
Description
installation costs
Complete wind turbine – Floating 70 %
Complete wind turbine – Bottom-fixed 80 %1
Subsea cables 10 %1
Substation 90 %
Mooring system 90 %

1) Source: (BVG Associates 2012)

The purpose of determining the decommissioning cost is not to create an exhaustive estimate
of all costs likely to be incurred in the decommissioning phase, rather making a simplified
estimate over the main drivers involving this phase. Such costs can be estimated but are
beyond the scope of this analysis.

Scrap value varies greatly on monthly and yearly basis, depending on economic conditions
and so on. Since the scrap price is so volatile, it is difficult to estimate the scrap price 20 or
more years in advance. Figure 91 shows the Scrap Price Index for demolition scrap calculated
on the basis of the average price in € per ton for France, Germany, Italy, Spain and UK.

117
Figure 91: Scrap Price Index - Demolition Scrap (The European Steel Association 2013).

Based on the average scrap price index between 2000 and 2013, the scrap price at time of
decommissioning (20 years after commissioning for the benchmark farm) is estimated to be
€2013 709 per ton. Low and high scenarios are set to ± 10 %.

Scrap steel values of the different concept wind turbines are evaluated from substructure steel
consumptions, presented in Table 14 and Table 15, turbine material consumption presented in
Table 5 and mooring system discussed in section 3.2.3. The expected decommissioning costs
per MW for each concept are presented in Table 33 and Table 34.

Table 33: Expected approximate decommissioning costs per MW. All values in €2013

Concept TLB B TLB X3 Hywind WindFloat

Decommissioning costs € 205 000 € 205 000 € 203 000 € 193 000
Scrap revenue € 133 000 € 142 000 € 311 000 € 424 000
Total DECEX € 72 000 € 63 000 - € 108 000 - € 231 000

Table 34: Expected approximate decommissioning costs per MW. All values in €2013

Concept SWAY Monopile Jacket

Decommissioning costs € 170 000 € 302 000 € 368 000
Scrap revenue € 193 000 € 238 000 € 125 000
Total DECEX - € 23 000 € 64 000 € 244 000

Of the evaluated concepts, the decommissioning cost is expected to be highest for bottom-
fixed jacket concepts, as the installation cost, and thus decommissioning cost is highest for
this concept. Additionally, the jacket structure relies on relatively low material consumption,
giving low return from scrap steel. Due to relatively inexpensive installation costs for floating
concepts, these are also expected to be associated with low decommissioning costs. SWAY
and WindFloat provide the lowest values due to relatively inexpensive wind turbine and
mooring system installation operations. Additionally, the three heaviest floating concepts,
Hywind, WindFloat and SWAY, are expected to gain so much from scrap steel that the scrap
value exceeds the modest decommissioning costs, resulting in negative DECEX values.

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 4. LEVELISED COST OF ENERGY ANALYSES
The purpose of this section is to summarise and discuss findings from chapter 3, by presenting
baseline capital expenditures prior to and during installation of the benchmark wind farms,
operational expenditures during the operation phase of the different wind farms' life time, and
decommissioning expenditures for the final life cycle stages. Energy production estimates are
used as bases for finding benchmark site levelised costs of energy for the different concepts,
both through baseline scenarios and high and low cost scenarios affected by capacity factors
and availabilities.

4.1 Capital Expenditures

This section summarises all baseline capital expenditures (CAPEX) found in chapter 3 of the
thesis, presented in Table 35 and Table 36.

Table 35: Concept CAPEX costs per MW. All values in €2013

Descriptions TLB B TLB X3 Hywind WindFloat

Development and consenting € 208 000 € 208 000 € 208 000 € 208 000
Construction phase insurance € 50 000 € 50 000 € 50 000 € 50 000
Turbine costs (excl. tower) € 1 281 000 € 1 281 000 € 1 281 000 € 1 281 000
Production costs (incl. tower) € 326 000 € 371 000 € 888 000 € 1 640 000
Mooring costs (incl. inst.) € 421 000 € 421 000 € 126 000 € 170 000
Grid costs (incl. inst.) € 1 097 000 € 1 097 000 € 1 097 000 € 1 097 000
Installation of wind turbine € 154 000 € 154 000 € 157 000 € 129 000
Per MW CAPEX (€2013) € 3 538 000 € 3 582 000 € 3 807 000 € 4 574 000
Benchmark farm CAPEX M€ 1 769 M€ 1 791 M€ 1 903 M€ 2 288

Table 36: Concept CAPEX costs per MW. All values in €2013

Descriptions SWAY Monopile Jacket

Development and consenting € 208 000 € 208 000 € 208 000
Construction phase insurance € 50 000 € 50 000 € 50 000
Turbine costs (excl. tower) € 1 281 000 € 1 281 000 € 1 281 000
Production costs (incl. tower) € 550 000 € 612 000 € 768 000
Mooring costs (incl. inst.) € 343 000 - -
Grid costs (incl. inst.) € 1 097 000 € 1 070 000 € 1 070 000
Installation of wind turbine € 131 000 € 300 000 € 383 000
Per MW CAPEX (€2013) € 3 661 000 € 3 521 000 € 3 759 000
Benchmark farm CAPEX M€ 1 830 M€ 1 760 M€ 1 880

The table indicates that the monopile wind farm is expected to have the lowest CAPEX values
at benchmark sites, with the TLB concepts following close behind. Hywind and WindFloat
are the concepts with the highest CAPEX values associated with construction of benchmark
wind farms. As indicated in the table, the single most dominant CAPEX cost for concept
benchmark wind farms are costs related to acquisition of the turbines, with one exception.
Because of the tremendous substructure weight and assumed complexity, WindFloat is
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expected to have production costs for the substructure as the dominating CAPEX cost. A
graphical breakdown of baseline CAPEX costs for benchmark sites is presented in Figure 92.

Figure 92: CAPEX per MW breakdown

The graphical breakdown illuminates the key differences between evaluated concepts, based
on the set assumptions. The TLB concepts are expected to have the lowest production costs,
indicating a severe advantage over the rival floating concepts closest to commercial
realisation. However, mooring costs for the TLB and SWAY concepts are considerable when
being compared to Hywind and WindFloat. Note that mooring costs are expected to be highly
dependent on site seabed conditions, and that mooring system CAPEX costs could be both
higher and lower with different benthic conditions.

Grid connection costs are expected to be a dominant contribution to total CAPEX values for
all concepts. All comparable concepts are assigned equal grid connection costs.

The bottom-fixed concept CAPEX costs do not include mooring costs, but high production
and installation costs almost or completely counteracts these effects for monopile and jacket
concepts. Altogether, all concepts except WindFloat lie within a CAPEX margin of
approximately 8 %.

The total CAPEX costs for the benchmark wind farms lie close to equivalent CAPEX costs
indicated by generic sources, ranging from approximately €2013 1 800 - 1 900 million
(Douglas Westwood 2010; Scottish Enterprise 2011; The Crown Estate 2010). These
indications are predominantly based on bottom-fixed wind turbines positioned closer to shore
than our benchmark farms, leading to assumptions that especially comparable bottom-fixed
concepts should have CAPEX costs somewhat higher than the source estimates. However, our
estimates do not include contingency additions, leading to assumptions that our CAPEX
estimates seem reasonable.

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 4.2 Operational Expenditures
This section summarises all operational expenditures (OPEX) found through O&M costs and
operation phase insurance costs presented in section 3.4.3 of the thesis. OPEX costs are
presented in Table 37.

Table 37: OPEX per MW

Floating Bottom-fixed
Descriptions
concepts concepts
Annual operation & maintenance costs € 113 000 € 97 000
Annual operation phase insurance costs € 18 000 k€ 18 000
Per MW OPEX (€2013/annum) € 131 000 k€ 115 000
Benchmark farm OPEX M€ 65 M€ 57

As indicated in the table, benchmark OPEX costs for floating concepts are assumed to be
approximately 14 % higher than those for bottom-fixed concepts. These cost differences are
attributed to vessel costs related to unplanned maintenance, as jack-up vessels employed for
bottom-fixed wind farms have day rates of approximately two thirds of their floating
equivalents.

The estimated O&M costs for bottom-fixed and floating farms are somewhat higher than
those indicated by generic sources, with rough estimates between €2013 45 - 50 million per
annum (Douglas Westwood 2010; Scottish Enterprise 2011; The Crown Estate 2010). This
difference is likely to come from increased offshore distance relative to sources, affecting
both O&M costs through increased transportation costs and introduction of a mother vessel,
as well as increased maintenance efforts on export cables.

4.3 Decommissioning Expenditures

Costs related to decommissioning of the concept wind farms, DECEX costs, are presented in
section 3.5 and summarised in Table 38 and Table 39.

Table 38: DECEX per MW. All values in €2013

Concept TLB B TLB X3 Hywind WindFloat

Decommissioning costs € 207 000 € 207 000 € 205 000 € 195 000
Scrap revenue € 133 000 € 142 000 € 311 000 € 424 000
Per MW DECEX (€2013) € 74 000 € 65 000 - € 106 000 - € 229 000
Benchmark farm DECEX M€ 37 M€ 33 - M€ 53 - M€ 115

Table 39: DECEX per MW. All values in €2013

Concept SWAY Monopile Jacket

Decommissioning costs € 172 000 € 304 000 € 371 000
Scrap revenue € 193 000 € 238 000 € 125 000
Per MW DECEX (€2013) - € 20 000 € 67 000 € 246 000
Benchmark farm DECEX - M€ 10 M€ 33 M€ 123

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The decommissioning costs are expected to be highest for bottom-fixed jacket concepts,
because of the set relation between decommissioning and installation costs, as bottom-fixed
concepts are expected to have higher installation costs, summarised in section 4.1. Due to low
installation costs, floating concepts are expected to have low decommissioning costs, and by
adding scrap steel revenue, the three heaviest concepts (WindFloat, Hywind and SWAY) are
expected to have negative total DECEX values.

4.4 Levelised Cost of Energy Results

Here, levelised costs of energy for the evaluated concepts are presented, based on distributed
and discounted baseline costs relative to discounted baseline net generation. Additionally,
concept LCOE ranges are presented through finding the equivalent values for all low and high
case scenarios for costs.

LCOE results for this thesis are based on assumptions that FID is set to 2013 and WCD is
assumed to be five years later, in 2018. The different CAPEX costs are distributed over the
six-year period from FID to one year past WCD according to when they are assumed to occur,
and these assumptions are based on (BVG Associates 2012) and (Howard 2012). Discount
factors are based on weighted average costs of capital of 8.2 %, as introduced in section 1.5.3.

Table 40: Distribution of CAPEX costs

Phasing (years) -4 -3 -2 -1 0 1
Discount rate factor 1 0.961 0.889 0.821 0.759 0.701
Development and consenting1 56 % 10 % 11 % 11 % 12 % 1%
Construction phase insurance2 0% 25 % 25 % 25 % 25 % 0%
Turbine costs (ex. tower) 2 0% 0% 19 % 39 % 42 % 0%
Production costs (incl. tower) 0% 0% 19 % 39 % 42 % 0%
Mooring costs (incl. installation) 0% 0% 0% 40 % 60 % 0%
Grid costs (incl. installation) 0% 20 % 75 % 5% 0% 0%
Installation of wind turbine2 0% 0% 0% 36 % 64 % 0%

1) Source: (BVG Associates 2012)

2) Source: (Howard 2012)

O&M costs are assumed to be distributed by 100 % of annual costs assigned annually from
the year after WCD (Year 1 according to Table 40) and throughout the lifetime of the
benchmark wind farm. DECEX costs are assumed to be distributed by 100 % at the year of
decommissioning, 21 years past WCD for the benchmark wind farms.

LCOE values are computed using a MS Excel LCOE model based on (Howard 2012). Per
MW CAPEX, OPEX and DECEX values, both baseline, low cases and high cases, are
implemented in the model and distributed according to presented distribution values, i.e.
through values presented in Table 40. Based on presented discount rates and energy
production range estimates shown in section 2.2.3 and Digital Appendix 1, LCOE ranges for
all concepts are calculated.

These LCOE ranges are presented in Figure 93, with baseline concept LCOE breakdowns
presented in Figure 94.

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Figure 93: Concept levelised costs of energy at benchmark sites

The figures indicate lowest baseline LCOEs at benchmark sites for the monopile-based
bottom-fixed wind turbines at €2013 135.3 per MWh. The TLB B concept is expected to come
in second, with baseline LCOE at €2013 139.0 per MWh, approximately 2.7 % higher than
monopiles. The TLB X3 concept is expected to have slightly higher LCOE due to added
material consumption and production costs relative to TLB B. Jacket structures and SWAY
are indicated with LCOEs of approximately €2013 142.0 per MWh, while the Hywind and
WindFloat concepts are indicated somewhat higher at €2013 146.0 and €2013 167.3 per MWh,
respectively.

Based on expected Northern European electricity price estimates of approximately € 2013 40 -

50 (European Commission 2012b), it seems offshore wind projects would have to rely on cost
reductions through market and technology developments, political efforts and incentives, or a
combination of these in order to obtain economic viability. European support levels for
offshore wind energy are highly dependent on country, ranging from close to nothing to near
€2013 150 per MWh, more thoroughly presented in Appendix 3. Accordingly, economic
viability of the concepts are expected to vary with project location, but it seems the lower cost
concepts at benchmark conditions may even presently be nearly or completely feasible from
an economic point of view within thesis limits. Examples include, but are not limited to,
Germany and the Netherlands, where average support levels for offshore wind energy
presently seem to be between €2013 100 - 150 per MWh, depending on offshore wind energy
project qualities.

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Figure 94: Baseline LCOE distribution breakdown. Black lines indicate borders between CAPEX, OPEX and
DECEX

As indicated in the figure, the LCOE values are dominated by CAPEX costs, denoted by all
breakdown values between the X axis and the first black line occurring near €2013/MWh 100 -
130, depending on concept, on Figure 94. These come early in the life cycle of the wind
farms, and, accordingly, are not discounted to the same degree as costs occurring at a later
stage (Figure 95). The main drivers to the energy costs for all concepts beside WindFloat are
those from turbine acquisition and grid connection, which is expected, as the included
components involve most of the technology utilised for energy production. However, for the
Hywind and WindFloat concepts, production costs severely attribute to concept LCOE.
Additionally, OPEX costs, which are indicated above mentioned black line, attribute to
roughly between one fifth and one quarter of the total LCOE. DECEX costs are relatively
small, and in some instances negative. Since these occur at a late stage, they are discounted to
the level where they almost have no impact on the total concept LCOE.

The TLB concepts and SWAY are expected to have the highest mooring cost contributions,
while the bottom-fixed concepts are expected to have highest wind turbine installation cost
contributions to LCOE.

Total cost distributions over the life cycle of the TLB B concept at benchmark farm site are
shown in Figure 95. As indicated, the majority of the LCOE costs occur prior to WCD, and in
relation, DECEX costs are regarded minuscule.

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Figure 95: Life cycle LCOE distribution TLB B (Blue indicates CAPEX contributions to LCOE, while red and
green indicate OPEX and DECEX, respectively)

4.4.1 Levelised Cost of Energy Model Verification

The MS Excel LCOE model's ability to produce plausible results has been tested by
comparing life cycle costs and LCOE figures on current project trends from The Crown Estate
(Howard 2012; The Crown Estate 2012) with LCOE model results coming from input of
variables as close to reference sources as possible, to compare results on as level grounds as
possible. From (Howard 2012), the so-called Case A, comprising of a 500 MW monopile
farm positioned 40 km from port is used as a reference basis due to similarities with certain
site qualities, such as water depth and foundation structure. Altered conditions include:

1. Setting the offshore distance to 40 km

2. Setting annual net full load hours to 3 482
3. Setting discount rates equivalent to (Howard 2012) at approximately 9.2 %
4. Adding a 10 % contingency to CAPEX costs

Given the thesis assumptions and change of distance dependant parameters, net load factors,
discount rates and contingencies, the MS Excel LCOE model indicates an LCOE value of
approximately €2013 157.8 per MWh, while (Howard 2012) indicates equivalents of €2013 162
per MWh, approximately 2.6 % more than what is indicated by the MS Excel LCOE model.

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However, the (Howard 2012) data are different from thesis data in some aspects. Firstly, the
thesis implements a somewhat smaller tower, and disregards costs associated with component
transport. Secondly, installation processes are assumed to be performed continuously, not
periodically, which may add to mobilisation costs. Finally, (Howard 2012) does not
implement scrap steel revenues for DECEX costs, although the discounting of such values are
expected to be so severe this fact has minuscule impacts. Additionally, certain areas of the
input values are not directly comparable because of certain assumptions, e.g. AC grid
connections are preferred for (Howard 2012; The Crown Estate 2012). However, the
comparisons seem to indicate the MS Excel LCOE model (Digital Appendix 1) is able to
produce plausible LCOE results.

LCOE results are also supported by (Delay & Jennings 2008), suggesting LCOE values for
space-frame structures at water depths and offshore distances comparable to thesis sites
roughly 3 % higher than baseline LCOE for jacket structures.

4.4.2 Onshore References

To put estimated levelised costs of energy for offshore wind concepts into perspective,
onshore equivalents, i.e. LCOE approximations for land-based large-scale wind farms, are
briefly presented.

Figure 96 shows the levelised cost of energy trend for onshore wind in the period from 1980
to 2009. The data represents historical evaluations from four different sources, including
analyses from Lawrence Berkley National Laboratory (LBNL) and the National Renewable
Energy Laboratory (NREL), Danish Energy Agency (DEA) and published estimates from
Lemming et al, all presented in (Hand et al. 2012), and Bloomberg New Energy Finance
(Liebreich 2013).

Figure 96: Onshore LCOE trends from 1980 to 2012, derived from (Hand et al. 2012; Liebreich 2013)

From the early 1980s to the early 2000s, the LCOE values have been reduced significantly
due to falling costs, enhanced performance and technological developments. After periods
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with decreasing costs, the trend shows increasing cost from 2004 to 2009.This increase in
capital costs has been largely tied to increases for the to the costs related to the turbine. The
turbine costs have been driven by increases in materials prices, energy prices, labour costs,
and manufacturer profitability, among others.

The figure indicates that present LCOE values for onshore wind farms are close to € 2013 50
per MWh, nearly one third of the offshore LCOE values presented in Figure 93.

A number of reasons lie behind onshore costs to be significantly less than less mature
offshore equivalents. One key aspect is that for onshore applications, turbines do not have to
withstand harsh offshore environments, leading to less expensive turbines. Substructures are
not to the same extent exposed to environmental loads, while distances and environments may
reduce grid connection costs. Additionally, costs related to installation and O&M are reduced
relative to offshore equivalents are expected to be severely lower due to easier site access
(Figure 97), although these are costs expected to vary with site terrains.

However, dependency of land areas and visual and acoustic pollution, as well as lower wind
energy potential onshore indicates further development of offshore wind energy industry.

Figure 97: Installation of onshore wind turbine (Sarens Group 2013)

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 5. SENSITIVITY ANALYSES
In the sensitivity analysis section, we will evaluate how levelised costs of energy for the
different concepts are affected by changes in key cost drivers, while other factors are held
constant at baseline levels for benchmark sites. Despite being the main focus of the thesis, the
sole purpose of this section is not only to evaluate how changes in cost drivers affect the
concepts differently, but also to explore how changes in cost drivers that have similar effects
on all concepts affect the levelised costs of energy for a generic offshore wind farm.

Evaluated key cost drivers include:

1. Farm sizes
2. Offshore distances
3. Water depths
4. Wind farm life spans
5. Total number of export cables
6. Steel prices
7. Vessel rates
8. Turbine costs
9. Load factors
10. Discount rates
11. Contingencies
12. Other cost reduction potentials

5.1 Farm Size

This section is intended to evaluate the effects on concept LCOE of gradual increase in farm
size, from benchmark farms consisting of 100 turbines to farms consisting of 1 000 turbines.
The following costs are assumed to change with increasing farm sizes:

1. Development and consenting costs: linear increase with 50 % of the benchmark

baseline costs per added 100 turbines in farm
2. Insurances: proportional increase
3. Turbine- and substructure production costs: proportional increase
4. Installation costs (ex. mobilisation) : proportional increase
5. Mooring costs (ex. mobilisation): proportional increase
6. Grid costs: proportional increase for acquisition of inter-array cables. Substations and
export cables changed according to increased farm capacity, costs relevant to these
increases are presented in section 3.2.4, section 3.3.5, Appendix 7, Appendix 8 and
Digital Appendix 1
7. O&M costs changed according to lower administration costs and economies of scale
for utilisation of vessels. Mother vessel costs are assumed not directly proportional to
size, as discussed in Appendix 10

Concept LCOE values with regards to changes in farm size are presented in Figure 98.

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Figure 98: LCOE changes with increasing farm sizes

As indicated, a sudden drop is expected when increasing the farm from 100 to 200 turbines.
This is mainly due to assumptions of employment of substations of larger size, with cost
increases disproportional to farm size increments. When farms grow to 300 units and up, it is
expected to be necessary to introduce further and substations to maintain high O&M
availabilities and energy production. Accordingly, LCOEs are assumed to sink at lower rates
from 300 units and up, as economies of scale are expected mainly in mobilisation costs,
development and consenting costs, as well as administrational and mother vessel costs for
O&M.

The step-by-step decline in LCOE with increasing farm sizes is expected from introduction of
further substations, accounting for large parts of LCOEs. Additionally, if farm sizes are
expected to increase even further, it may be profitable to increase the number of export cables
to reduce losses from increased power flow. However, this is not indicated in the evaluations
besides calculations of whether one or two cables should be deployed from an economical
point of view (Digital Appendix 1).

For the concepts with the lowest baseline LCOE values at benchmark sites, monopiles and
TLB concepts, LCOE declines of approximately 16 % are expected through a tenfold increase
in farm size. However, of these declines, approximately 10 % are expected to come from a
doubling of farm size relative to benchmark size, while approximately 12 % are expected to
come from increasing the farms from 100 to 300 units. For the WindFloat concept, with the
highest benchmark LCOE values, corresponding declines are expected at 13 % for a tenfold
size increase, while making the benchmark farm two or three times larger are associated with
declines of approximately 8 % and 10 %, respectively. Accordingly, we may expect higher
increases in profitability from making farms two or three times larger than the benchmark
farms, than increasing these larger farms even further. For concepts with benchmark LCOE
values between these discussed extremals, percentage declines with increasing farm sizes are
expected within discussed decline ranges.

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However, the presented LCOE values are based on assumptions of uniform and homogenous
depth and seabed conditions. In real-life scenarios, it is expected that wind farm locations may
not fulfil these assumptions, and that expected LCOE values could change due to
requirements to adapt mooring systems for floating concept wind farms, or substructures and
even substructure concepts for bottom-fixed farms (Offshore Center Danmark 2012). Wind
farm adaptations are expected to increase with increasing farm sizes, as probabilities of site
heterogeneity increase. Accordingly, the presented LCOE values may only be considered
mere estimates for trends with increasing farm sizes at homogenous locations.

5.2 Offshore Distance

Increasing offshore distances are expected to affect concept LCOEs through three main
drivers; increased transport costs for installation of wind turbines and mooring systems,
proportionally increased export cable acquisition and installation costs, and increased O&M
costs due to offshore distances (Appendix 10). Here, we aim to present how concept LCOEs
change with distances set from 100 to 500 km, with other costs set at baseline figures. Setting
minimum distances to 100 km allows for maintenance of set thesis assumptions on
evaluations of wind farms deployed at far offshore sites. Additionally, uncertainties with
regards to introduction of new cost elements, e.g. AC transmission technologies and logistical
operations with regards to wind farm O&M, are best addressed through withholding set
assumptions on deployment at far offshore distances.

Figure 99: LCOE changes with offshore distance

In Figure 99, LCOEs for all the discussed concepts for offshore distances of 100 - 500 km are
presented. The figure indicates a trend where LCOE values for bottom-fixed concepts incline
at a lower rate than floating equivalents with increasing offshore distances. This is expected to
be from costs associated with transport during the installation process. While the actual
installation process for at-site installation of wind turbines is expected to be constant and
therefore have rather constant costs, the costs associated with transport of the wind turbine

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and mooring system components to site are expected to increase with distance. For bottom-
fixed concepts, these are assigned to several turbines, as the jack-up vessels are assumed to
take multiple components per trip. For floating concepts, a number of vessels are included in
the individual transportation process (for our chosen installation strategy one AHTS and two
tug boats), and the costs associated with these vessels during the transportation processes are
not assigned to more than one wind turbine.

As shown, the relation between LCOE and offshore distance seems to be almost linear, with
an increase of approximately €2013 10 - 11 per MWh for every distance increment of 100 km.
However, for floating concepts, this value increases to €2013 11 - 13 per MWh when distances
exceed 300 km, due to increased contributions from discussed transport costs.

By halving offshore distance relative to benchmark sites, LCOE values are expected to be
reduced by between 6.3 % and 7.6 % for floating concepts. The higher the costs related to
towing of the wind turbines, the higher the LCOE value reduction percentages with declining
distances, as the relatively high transport costs related to installation processes may not
contribute to LCOEs to the same extent as at higher distances. SWAY is the concept which
most favours from reduction in distance, as this concept is assumed to have the highest towing
costs, presented in Appendix 9, while declining distances are expected to have the smallest
impact on the WindFloat concept due to the concept's towing stability and speed, assumed in
section 3.3.3.

With distances increasing from benchmark distance to 500 km, LCOE values for floating
concepts are expected to rise by between 20.4 % and 24.1 %. As expected, WindFloat reacts
most favourably on increasing distances, with opposite reactions for SWAY, given
assumptions from section 3.3.3.

Bottom-fixed concept LCOEs are expected to be reduced by approximately 7 % with halving

of benchmark distance, and to increase by around 21 % by setting distance to 500 km instead
of 200 km.

Both grid connection and O&M costs are expected to be higher for floating concepts, but this
difference is not to a large extent expected to be influenced by distance.

5.3 Water Depth

The initial water depths for floating concepts have been set to 200 m. Here, we intend to
investigate how varying sea depths up to 500 m affect levelised costs of energy for the
different concepts, with other variables held constant. For floating concepts, these LCOE
values are expected to mostly be affected by mooring line costs. As discussed in section 3.3.4,
water depth is only expected to have minor influences on mooring system installation costs.

For floating concepts, each concept is assigned depth ranges from concept specific minimum
expected applicable depths to depths of 500 m. For the TLB concepts, the minimum depth is
set to 75 m. Hywind, WindFloat and SWAY are assigned minimum depths of 100 m, 40 m
and 120 m, respectively.

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With increasing depths, mooring lines qualities for catenary mooring systems are expected to
remain constant. For optimal performance of taut leg and vertical mooring systems, mooring
line stiffnesses are required to exceed minimum ranges regardless of depths, and these
stiffness requirements satisfied by adjusting mooring line diameters. Mooring line costs
relative to depths are presented in section 3.2.3 and Appendix 6.

Table 41 gives mooring line consumption for various water depths. For catenary mooring
systems, the chain consumption near the seabed is assumed constant, at 50 m per line.

Table 41: Depth-dependent concept mooring line consumption (m), per wind turbine

Depth TLB B TLB X3 Hywind WindFloat SWAY

100 934 934 1 500 2 240 -1
200 1 766 1 766 1 950 2 840 101
300 2 609 2 609 2 400 3 440 201
400 3 455 3 455 2 850 4 040 301
500 4 302 4 302 3 300 4 640 401

1) Minimum depth set to 120 m

For monopile concepts, material consumptions are estimated from scaled substructure weights
for certain operational wind farms 3 at various depths. Approximations for depths of 5, 10, 15
and 20 m are set to be approximately 470, 735, 850 and 1010 tons, respectively. Note that
monopile weights are highly site-specific, and that the indicated values only are considered
valid as mere estimations to show cost trends. Production costs are estimated similar to
section 3.2.2.

For jacket concepts, material consumptions are estimated from jackets suited for deployment
at 20 m and 50 m. For 20 m depth, jacket weight is estimated to 500 tons and pile weights to
250 tons, based on jackets deployed at UK-based Ormonde Offshore Wind Farm (Lindø
Offshore Renewables Center 2013). For 50 m depth, primary jacket weight is estimated to 545
tons, with pile weights at 438 tons (de Vries 2011). Production costs are estimated similar to
section 3.2.2.

Installation costs for bottom-fixed concepts are considered to be constant, regardless of

depths, although the shallowest waters indicated for monopile foundations are expected to be
too shallow for majorities of the current jack-up vessel fleet. With use of suitable vessels,
actual expected costs may both increase or decrease through differences in expected day rates
and capacities.

Figure 100 shows concept LCOE values at varying water depths.

3
5 m: Arklow, Burbo Bank. 10 m: Lincs, Lynn & Inner Dowsing. 15 m: Anholt, Gunfleet Sands, Lincs, Rhyl
Flats. 20 m: Anholt, Riffgat, Sheringham Shoal. (Lindø Offshore Renewables Center 2013)

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Figure 100: LCOE changes with changes in water depth

The figure indicates LCOE values remain fairly constant for Hywind and WindFloat, as the
increase of mooring line consumption is not proportional to depth increments, illustrated in
Table 41. Increased water depths are also expected to have small impacts on installation times
and capacities, presented in section 3.3.4. The figure indicates the TLB concepts suffer most
from increasing depths, as fibre mooring line costs per m is expected to increase significantly
with increased water depths due to stiffness requirements, presented in Appendix 6. The
SWAY concept is also expected to have increased per m costs of mooring lines with
increasing depths, but not to the same extent as the TLB concepts.

As shown in Figure 98 and Figure 99, LCOE values are expected to change according to farm
location parameters, leaving absolute values presented in Figure 100 uncertain for evaluations
of concepts with other wind farm qualities than the evaluated benchmark farms. However,
LCOE trend developments relative to water depths from Figure 100 are expected valid also
for wind farm qualities different from benchmark farms.

The TLB concepts are expected to have the lowest LCOE values when depths are less than
approximately 250 m, and between 250 m and 275 m, SWAY seems to become favourable
over TLB X3 and TLB B, respectively. When depths increase further, the Hywind concept is
expected to have lower LCOEs than the TLB B and TLB X3 concepts at depths in excess of
approximately 310 m and 325 m, respectively. WindFloat seems to become favourable to
TLB around 500 m. LCOEs for the SWAY concept seems to be favourable relative to Hywind
until an assumed depth threshold for the SWAY concept near 500 m (Jorde 2013).

The minimum applicable depth for WindFloat is assumed to be approximately 40 m (Maciel

2012). However, as mooring line consumption for catenary mooring systems are expected to
increase dramatically when depths are less than approximately 100 m (Nygaard 2013), and
few data on expected actual mooring line lengths seem available, LCOE values for depths less

133
than 100 m should only be considered mere estimates for cost trends, indicated through a
dashed curve.

Bottom-fixed energy costs are assumed to increase to a much larger extent with increased
depths. Note that the indicated LCOE values come from averaged depth-dependent material
consumptions of operational wind farms, and may or may not indicate generic trends due to
dependency on benthic conditions. Accordingly, these values should be viewed with caution,
and are only assumed to be valid as an indication on cost trends.

5.4 Project Life Span

In this section, changes in LCOE with increased wind farm life times are presented. The
benchmark LCOE values are for farms producing electricity for 20 years before being
decommissioned. However, increasing life spans to 25 or 30 years (Figure 101) are expected
to influence LCOE values significantly. With extended life times, the wind turbines are
expected to produce electricity for a longer period, while DECEX costs are discounted even
further. Expected effects from increased wear and tear with extended life spans are simulated
through adding 5 % to the annual OPEX costs for years 20 to 25, and 10 % for years 25 to 30.
Note that wind turbine costs are not adjusted according to possible additional production costs
needed to extend life spans, possibly leading to somewhat liberal estimations. However,
generic sources used for estimating turbine costs indicate possible wind farm life spans of
more than 20 years. It is therefore assumed that the deployed turbines are suited for life span
extensions. Underwater components are usually required to have expected life spans of at
least 30 years.

Figure 101: LCOE changes with extended wind farm life spans

As indicated in the figure, LCOE values are expected to fall by approximately €2013 13.5 –
15.7 per MWh or approximately 10 %, by expanding the service life of the wind farms by ten
years. A five year extension of life span indicates a LCOE drop of approximately € 2013 8.5 -
10.4 per MWh, corresponding to 6 % - 6.5 %. The highest figures come from the concept with
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the highest benchmark LCOE, WindFloat, while the lowest figures come from the three
concepts with the lowest LCOE values, the monopile and the TLB concepts.

A steeper slope is expected for bottom-fixed concepts than for floating concepts. This comes
from the fact that while electricity production is expected equal for all concepts, the floating
concepts are expected to have higher OPEX costs, and resultantly, the increase of OPEX costs
due to wear and tear is expected to be higher for floating concepts than for bottom-fixed
equivalents.

5.5 Optimisation of Farm Qualities

Based on findings from section 5.1 through 5.4, it seems apparent that LCOE values decline
with declining offshore distances, water depths, and with increasing life spans and farm sizes.
Given these findings, we aim to present how baseline LCOE values for all concepts are
expected to be given more optimal wind farm qualities. We aim to present somewhat realistic
wind farm qualities with regards to employing present technology, reducing needs of severe
wind farm adaptations and reducing unforeseeable risks. Accordingly, wind farms are set to
consist of 300 wind turbines (Offshore Center Danmark 2012) with life spans expected at 25
years. To maintain assumptions of deployment at far offshore sites and sustain previous cost
estimation feasibilities, the offshore distance is set to 100 km. Water depths are set to the
optimal depth for all concepts indicated in Figure 100, being 5 m for monopiles, 20 m for
jackets, 75 m for TLB concepts, 120 m for SWAY and 100 m for Hywind and WindFloat

LCOE ranges are presented in Figure 102, based on baseline, low and high costs.

Figure 102: Baseline concept levelised costs of energy at optimised wind farm locations

By comparisons with Figure 93, LCOE values seem to have dropped by approximately €2013
29 - 33 per MWh, with LCOEs being in the same order as for benchmark sites. It seems the
TLB concepts are expected to see the greatest LCOE declines, both in absolute values at near

135
€2013 33 per MWh and relative at approximately 23.5 %, as these concepts are the most water
depth sensitive concepts in the analyses. By comparison, it seems jacket structures favour
least from reducing water depths with regards to absolute values, while the lowest percentage
decline is realised for WindFloat at below 19 %.

Reduction of depths have also indicated TLB concept mooring costs have been reduced so
much TLB B LCOE values at 75 m are lower than corresponding values for monopiles at 5 m.

Further, LCOE ranges if a possible investor is nearer an investment decision for deployment
at optimised wind farm sites are estimated, in order to reduce some of the uncertainties related
to the optimised LCOE ranges. If an investment decision is to be performed, it is expected
that fixed offers on certain components are acquired with only minor uncertainties, while
other factors remain somewhat uncertain. Accordingly, some cost elements are fixed at
baseline levels, while other are expected to possibly vary within ranges narrower or equal to
ranges presented previous in the thesis. The following assumptions are made for estimating
optimised LCOE values with lower grades of uncertainty:

1. Development and consenting costs, insurances, turbine costs, production costs,

mooring system acquisition costs and electrical component costs are expected to be
fixed at baseline levels due to assumptions that fixed offers or tenders are gathered
from external producers and suppliers
2. Capacity factors and availabilities are expected to be predictable within ± 1 % from
baseline values
3. Vessel rates are expected to be known through short term fixed offers, while expected
to potentially vary within thesis ranges on longer terms. Accordingly, installation costs
are assumed to be predicted, while O&M costs and decommissioning costs are
assumed to be subjected to variations within original thesis ranges

LCOE estimations given these assumptions are presented in Figure 103.

Figure 103: Baseline concept levelised costs of energy at optimised wind farm locations, reduced uncertainties

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As expected, baseline LCOE values are expected to remain constant, while LCOE ranges are
expected to narrow, as several uncertain factors are assumed known and disregarded.
Uncertainties are accordingly reduced from an average span of near 30 % - 40 %, indicated by
dashed lines, to spans between approximately 10 % and 13 %.

However, LCOEs are still presented within a certain range, as O&M costs are expected to lie
within somewhat wide ranges presented earlier in the thesis.

Please note that actual cost estimations and expected LCOE values may be somewhat
different for a potential investment decision, as Figure 103 only aims to illuminate how
uncertainties with regards to expected LCOE values could be reduced when approaching FID.

5.6 Quantified Key Cost Drivers

Here, we intend to present how each concept is expected to react to changes in presented cost
drivers. Additionally, we wish to investigate how changes in certain key cost drivers besides
the already discussed drivers are expected to affect baseline LCOE values for the evaluated
benchmark concepts. Concept-specific changes are presented prior to general discussions of
not already introduced cost drivers.

Figure 104 through Figure 110 graphically present absolute value impacts on baseline LCOE
values at benchmark sites for all evaluated concepts through changes in certain key cost
drivers. Asterisked categories indicate cost drivers likely to be uncertain prior to an eventual
investment decision. Cost categories not denoted by an asterisk are likely to be decided and
evaluated prior to any eventual investment decisions, and are accordingly not expected to
greatly influence LCOE uncertainties.

Figure 104: TLB B LCOE sensitivity

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Figure 105: TLB X3 LCOE sensitivity

Figure 106: Hywind LCOE sensitivity

138
Figure 107: WindFloat LCOE sensitivity

Figure 108: SWAY LCOE sensitivity

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Figure 109: Monopile LCOE sensitivity

Figure 110: Jacket LCOE sensitivity

As indicated for Figure 104 through Figure 110, all concepts are expected to react similarly
with respect to absolute value changes for changes in generic cost drivers, such as farm sizes,
offshore distances, life spans, export cable numbers, turbine costs, load factors and discount
rates. However, concepts seem to react differently to specific parameters such as water
depths, steel costs, vessel rates, contingencies and generic cost reductions. Minor differences
between floating and bottom-fixed concepts seem to be expected through different installation
processes.

To further illuminate how the different concepts react to changes in key cost drivers, specific
changes, both absolute and relative, will be presented for the cost driver categories.

140
Export Cable Sensitivity
A key cost reduction potential for offshore wind energy could be to employ a European
Supergrid, as presented in section 1.1.2. As discussed in section 3.2.4 and Appendix 7, the
benchmark farms are to be connected to the mainland grid via one export cable. Positioning of
a wind farm in the vicinity of an offshore Supergrid hub could remove the need of an onshore
substation, as the grid voltage could be assumed to be close to that delivered by an offshore
substation. Additionally, costs related to acquisition and installation of the export cable could
be considered negligible with small distances from substation to grid.

With increasing numbers of realised wind farms, it is expected several wind farms will be
positioned in clusters close to each other. Accordingly, it may be beneficial for several wind
farms to share a common connection to the onshore grid. This is already implemented in
German offshore wind farm plans, where offshore substations connecting several farms to
shore are owned by the national transmission system operator. Accordingly, the far point of
the grid within a wind farm may be a short export cable from an offshore substation, leading
to a larger connection substation. (Multiconsult 2012)

Offshore wind farms could also be connected to offshore oil and gas installations, commonly
relying on gas turbines for production of electricity. Reducing the dependency on gas turbines
could reduce both fuel costs and emissions. To remove dependencies on gas turbines to act as
backup energy sources, oil and gas installations and wind farms could possibly share grid
connections to shore or to a passing Supergrid.

For all concepts, we aim to present how baseline LCOEs for benchmark sites are affected by
negliging the export cables and onshore substation, i.e. connecting the wind farms to a
proposed, nearby passing Supergrid. We also wish to show effects on LCOEs by increasing
the number of export cables to two cables of smaller cross section area, as presented in
Appendix 7. Both absolute value changes and percentage changes are presented in Figure
111.

Figure 111: LCOE sensitivity to export cable numbers. Red and green indicate negative and positive absolute
value effects, respectively, while yellow and blue indicate corresponding percentage changes

141
As indicated, all concepts seem to respond almost identically with respect to absolute LCOE
value changes by either disregarding the export cables and onshore substation (below the
horizontal axis), or employing two smaller export cables instead of one larger (above the
horizontal axis). Reductions in LCOE of approximately €2013 18 per MWh are expected by
disregarding export cables, while increases of approximately € 2013 10 per MWh are expected
by replacing the baseline export cable with two cables of smaller diameters.

These changes are expected, as identical grid costs are expected for all comparable concepts.
Any minor concept differences in absolute value reductions associated with negliging export
cables and onshore substations come from the fact that when removing these components,
decommissioning costs are changed. When accounting for scrap steel revenues, the concepts
are expected to react somewhat differently, but as the DECEX costs are severely discounted,
only minuscule differences are expected.

LCOE percentage changes for additions or subtractions of export cables are assumed to be
greater the lower benchmark LCOE values are, i.e. highest for monopiles and lowest for
WindFloat. Accordingly, the higher benchmark LCOE values are, the less sensitive concepts
are to changes in generic parameters such as export cable costs. This is expected, as virtually
equal values for all concepts are deducted or added to different benchmark LCOE values. By
increasing the number of export cables, LCOE values are expected to rise between
approximately 8 % and 10 %, while corresponding figures when negliging export cables and
onshore substations are 11 % and 13 %.

Turbine Costs
As indicated in section 4.4, turbine costs are a dominant cost driver for concept LCOE.
Accordingly, we aim to evaluate how baseline LCOE values change when turbine costs
(excluding towers) are set at low and high levels of ± 10 % relative to the baseline value,
derived from lower and higher values of generic sources. These changes are presented in
Figure 112, with cost increases and decreases shown above and below the horizontal axis,
respectively.

Figure 112: LCOE sensitivity to turbine costs. Red and green indicate negative and positive absolute value
effects, respectively, while yellow and blue indicate corresponding percentage changes

142
As all concepts deploy turbines of equal costs, a 10 % increase or decrease in turbine costs are
expected to either add or deduct approximately € 2013 3.5 per MWh from benchmark LCOEs,
severely less than export cable qualities discussed in previous sections. Since equal absolute
values are either added or deducted to different benchmark LCOE values, concepts are
expected to be less sensitive to turbine cost changes with increasing benchmark LCOE values.

Steel Costs and Consumption

Another important cost driver is the material costs related to steel consumption. As indicated
in section 2.3.1, lower and higher steel costs are assumed at ± 40 %. Accordingly, material
costs for turbine towers and floating substructures are altered, while manufacturing costs are
held constant. Additionally, costs related to acquisition of RNAs and mooring systems are
altered based on their steel weight. Concept LCOE effects are presented in Figure 113, with
cost increases and decreases shown above and below the horizontal axis, respectively.

Figure 113: LCOE sensitivity to steel costs. Red and green indicate negative and positive absolute value effects,
respectively, while yellow and blue indicate corresponding percentage changes

Steel costs, in addition to turbine costs and vessel costs, are parameters most likely to be
volatile and outside of control for a wind farm constructor through market fluctuations and
demand mechanisms. Seeing as the discussed concepts vary greatly in steel consumptions,
changes in steel costs are expected to have highly differentiated impacts on all concepts. In
absolute values, the concepts with the highest steel consumptions, WindFloat and Hywind are
expected to suffer or gain most from increasing or decreasing steel costs. Heavy substructure
concepts seem to be more affected by steel cost changes than lighter constructions,
disproportionate to trends shown for relative generic cost changes with respect to baseline
LCOE levels shown in Figure 111 and Figure 112.

By comparisons with Figure 112, it seems an equal percentage change in turbine and steel
costs do not account for equal LCOE changes, as turbine costs account for larger portions of
the total LCOE than steel costs, shown in Figure 94. Accordingly, it seems offshore wind
turbines are more sensitive to turbine cost changes than steel cost changes. With maturing

143
offshore wind industries expecting greater competition and more entrants, it may also be
assumed turbine cost changes may be more affected than steel cost changes, as a 10 % short-
term turbine cost change seems more plausible than a 40 % steel cost change.

In addition to indicating material costs, concept steel consumptions may also serve as an
indication of impact on global steel distribution, given large-scale production. The annual
steel production is estimated to approximately 1 520 million tons (Elliott et al. 2013), and if a
hypothetical large-scale wind turbine production volume were to occupy larger amounts of
the global steel production, impacts on worldwide steel prices may be likely to be seen.

Table 42 presents the amount of global, annual steel production consumed through producing
100, 1 000 or 10 000 of the evaluated wind turbine concepts, including steel used for mooring
systems for applicable concepts.

Table 42: Steel Consumption Footprint

Number of
100 1 000 10 000
Turbines
TLB B 0.01 % 0.06 % 0.61 %
TLB X3 0.01 % 0.07 % 0.66 %
Hywind 0.01 % 0.14 % 1.44 %
WindFloat 0.02 % 0.20 % 1.97 %
SWAY 0.01 % 0.09 % 0.89 %
Monopile 0.01 % 0.11 % 1.10 %
Jacket 0.01 % 0.09 % 0.86 %

As indicated, production of 100 turbines does not seem to consume any large portions of the
global steel production. When increasing this number to 10 000, it seems that concept
material consumptions account for approximately 0.6 % to 2 % of global steel production.
With these figures, it is expected that global steel price may be affected, but quantifications of
these impacts is expected to be best performed through extensive simulations accounting for
several variables. It is expected that mass production of the most steel-intensive the evaluated
concepts, WindFloat and Hywind, would affect global steel prices the most of the evaluated
concepts. However, for this thesis, it is decided that steel price fluctuation effects are
evaluated adequately through estimating LCOE differences with steel cost changes of ± 40 %.

Vessel Rates
Day rates for installation vessels and external O&M vessels are expected to be extremely
volatile. Accordingly, LCOE values for changes in installation vessel rates from low to high
estimates presented in section 2.3.2, with all other costs are held at baseline levels, are
presented. For OPEX cost influences on LCOE, vessel rate fluctuations are simulated through
assigning day rate changes of ± 20 % on all external vessels used for unplanned maintenance
operations, while costs associated with mother vessels or specialised maintenance vessels are
changed according to low and high estimates presented in section 2.3.2. LCOE effects with
changing vessel costs are presented in Figure 114, with cost increases and decreases shown
above and below the horizontal axis, respectively.

144
Figure 114: LCOE sensitivity to vessel rates. Red and green indicate negative and positive absolute value
effects, respectively, while yellow and blue indicate corresponding percentage changes

The figure indicates that floating concepts are less sensitive to changes in vessel day rates
than bottom-fixed concepts, both with regards to absolute and relative values. This is likely
because floating installation costs are estimated to be lower than bottom-fixed installation
costs, relying on less expensive vessels. Vessel costs are market dependent, and accordingly
expected not to be directly foreseeable by wind farm developers. Adequate attention to this
should be paid if an investment decision were to be performed.

As presented in section 3.3.3, all floating concepts are expected to have similar installation
procedures and costs, and OPEX costs are set to be similar. Accordingly, floating concepts
are expected to react similarly to vessel costs with regards to absolute values, leading to
somewhat different percentage changes based on benchmark LCOE differences. As bottom-
fixed concepts require more costly installations from vessels expected to be more expensive
than those used for floating concepts, bottom-fixed concepts seem to be more sensitive to
vessel cost changes than their floating equivalents.

By comparison with Figure 112, it seems concept vessel cost sensitivities are comparable with
turbine cost sensitivities within the thesis extremals.

Load Factors
Baseline capacity factors are set to 53 % for all concepts. Changes in baseline LCOE with
capacity factors in the region of 50 % to 56 % are presented, which, when combined with
low- and high case farm availabilities, leads to net load factors for floating concepts of
between 40.1 % and 47.5 %, with bottom-fixed equivalents somewhat different due to
availability simulation differences, indicated in Digital Appendix 1. LCOE sensitivities with
changing load factors are presented in Figure 115, with effects from lowering or amplifying
site load factors above or below the horizontal axis, respectively.

145
Figure 115: LCOE sensitivity to load factors. Red and green indicate negative and positive absolute value
effects, respectively, while yellow and blue indicate corresponding percentage changes

As shown in Figure 115, it seems positioning wind farms at sites with capacity factors 3 %
higher or lower than what could be achieved using deployed generic 5 MW turbines at the
benchmark farm site could reduce or increase overall LCOE values by approximately 10 %.
Energy production is highly dependent on realised conditions, and a 3 % change of capacity
factors for a 500 MW is expected to change annual gross energy production (before
accounting any other losses than those from capacity factors) equivalent to the annual average
electricity consumption of nearly 7 500 EU dwellings (Nikiel & Oxley 2011). Accordingly,
adequate meteorological surveys and availability simulations are key prior to positioning and
construction of an offshore wind farm to better predict energy costs, although real-life
weather conditions never could be expected to be certainly predicted.

As concept benchmark LCOE values are different, concepts react dissimilarly to load factor
changes with respect to absolute values, as concepts with higher benchmark LCOE values are
expected to experience higher absolute value changes with load factor changes.

Any minor percentage sensitivity differences between floating and bottom-fixed concepts
may be attributed to simulated availabilities, and should be considered equal.

Discount Rates
Benchmark discount rates are set to 8.2 %. Depending on risk aversion, discount rates may be
set lower or higher, and here, LCOE changes with discount rates changed by ± 1 % from
benchmark rates are presented in Figure 116.

As the LCOE value by some may be interpreted as the break-even price for energy, the
required discount rate for an investment or a series of investment may influence the
discounted energy cost. A risk-averse investor may require a higher risk premium on his or
her investment than an investor more prone to taking risks. This would lead to higher costs of
capital, and the risk-averse investor would accordingly require higher energy prices to
experience breaking even on investments.

146
Figure 116: LCOE sensitivity to discount rates. Red and green indicate negative and positive absolute value
effects, respectively, while yellow and blue indicate corresponding percentage changes

Figure 116 presents LCOE sensitivities to 1 % changes in discount rates. As indicated, all
concepts are expected to react with similar relative LCOE changes by changing discount
rates, as costs are discounted on similar grounds for all concepts. Changing discount rates by
1 % leads to expected relative LCOE changes of approximately 7 %. However, with different
level of benchmark LCOE, concepts react differently with respect to absolute value changes,
at approximately €2013 9 per MWh for concepts with the lowest benchmark LCOEs, to
approximately €2013 12 per MWh for concepts with the highest LCOE values.

The employed and preferred discount rate for an investment project is expected to depend on
several factors, such as level of desired risk exposure for specific investors, expected risk
within a market or an industry, and country-specific risks and support mechanisms.
Accordingly, attention to required discount rates should be paid in case of investment
decisions.

Contingencies
In order to counteract LCOE effects from unforeseeable events not covered by insurances,
contingencies may be introduced as a percentage on CAPEX costs. Here, LCOE changes
coming from implementing contingencies up to 10 % on baseline CAPEX values are
presented in Figure 117. Contingencies may particularly be a feasible solution for risk-averse
investors.

As contingencies are added to concept dependent CAPEX values, these are expected to
influence LCOE changes both in regards to absolute and relative values. From Figure 117 it
seems 10 % contingencies add approximately 8 %, or between € 2013 10 – 13.5 per MWh to
benchmark LCOEs. However, if contingencies are introduced and not utilised due to lack of
unfortunate events, constructors are expected to be able to cut the presented values from their
overall energy costs, as contingencies are likely to be realised through funds or accounts
earmarked unforeseeable events. By comparisons with Figure 112, Figure 113 and Figure
114, it seems implementations of 10 % contingencies for all concepts may almost or
147
completely counteract market fluctuations increasing both turbine costs, steel costs and vessel
costs, as these are expected to be market dependent and outside of a wind farm developer's
control.

Figure 117: LCOE sensitivity to contingency implementations. Red and yellow indicate negative absolute value
and percentage change effects, respectively

Other Cost Reduction Potentials

Generic sources indicate that both CAPEX and OPEX costs may be reduced significantly in
the future. These cost reductions may be attributed to both technological developments in
components, such as introduction of new materials and technologies to reduce costs of
turbines, substructures, grid connections, installations and O&M, economies of scale, e.g.
through standardisation and scaling, and learning from the existing oil and gas industry
(Scottish Enterprise 2011).

The employed cost reduction potentials are presented in Table 43. Cost reduction potentials
are further introduced in Appendix 12, while LCOE effects are presented in Figure 118.

Table 43: Employed cost reduction potentials

Cost reduction
Cost drivers
percentage
Turbine 15 %
Substructure 10 %
Grid Connection 10 %
Installation 15 %
Operation and Maintenance 15 %

148
Figure 118: LCOE sensitivity to generic cost reductions. Green and blue indicate positive absolute value and
percentage change effects, respectively

As indicated, concept LCOEs are expected to react differently to generic cost reductions, both
with regards to relative and absolute changes, as generic cost reductions are expected to
influence both parameters shared for all concepts, such as turbine and grid connection costs,
and concept specific parameters, such as substructure production costs.

Generic cost reductions are expected to be between approximately €2013 15 - 19 per MWh,
depending on benchmark LCOE values. Corresponding relative reductions are expected at
between 10 and 13 %, indicating high concept sensitivity to cost reductions.

149
 6. CONCLUSION
6.1 Evaluation
For this thesis, we have aimed to evaluate all relevant costs occurring during the life cycles of
offshore wind farms. Five floating and two bottom-fixed concepts have been investigated, and
costs related to concept wind farm development, construction, operation and disengagement
have been estimated. These costs have been distributed over the wind farm life cycles based
on when they are expected to occur, and accordingly discounted to levelised values based on
set discount rates, resulting in levelised costs of energy (LCOE) associated with each concept.
Further, sensitivities with respect to key cost drivers have been evaluated.

To serve as basis for all analyses, a fictitious benchmark site for all concepts is defined,
positioned 200 km offshore at a generic Northern European offshore location. From
sensitivity analyses, it became apparent that expected LCOE values could be significantly
lowered by reducing offshore distances and water depths, extending life spans and increasing
wind farm sizes. Accordingly, LCOE values for a more optimised, while still realistic wind
farm scenario was computed.

Based on optimised site values, it seems TLB B wind turbines indicate lowest levelised costs
of energy, at €2013 106.3 per MWh, with monopile based bottom-fixed wind turbine levelised
costs of energy approximately 1 % above values for the TLB B concept. With reduced
offshore distances, these costs could be expected to be reduced even further However, the
TLB concepts are expected to be highly sensitive to increasing water depths, and are also
expected to be associated with higher risks in events of mooring line failures. The two
evaluated concepts associated with highest energy costs at optimised sites are expected to be
Hywind and WindFloat, respectively at €2013 115.9 and €2013 135.7 per MWh. These cost
differences are mainly attributed to steel consumption and associated production costs. For
the benchmark site, LCOE values are generally approximately 25 % to 30 % higher than at
the optimised sites. These differences are mainly attributed to economies of scale and offshore
distances. Acquisition and installation of export cables severely contribute to CAPEX costs
and LCOE values, rendering wind farms sensitive to offshore distances. With increased
depths, the TLB B concept loses its cost advantage over monopiles, resulting in lowest
benchmark LCOEs at €2013 135.3 per MWh.

From our findings, it seems floating concepts may be competitive to bottom-fixed concepts,
through less expensive installation and in some cases production operations, although
mooring systems contribute to costs for floating concepts. Based on present European
wholesale electricity prices expected in the region of €2013 40 - 50 per MWh, it seems offshore
wind energy is not an economically viable solution from a socioeconomic perspective.
However, with widely different support levels from country to country (Appendix 3), offshore
wind energy, both floating and bottom-fixed, could for some concepts at certain locations be
economically justifiable from a wind farm operator's point of view. Nevertheless, it seems
clear costs have to be cut even further to ensure competitiveness towards other sources of
energy production. The main focus should be set on reducing turbine costs, grid connection
costs and O&M costs, as these are expected to influence levelised costs of energy the most.
150
 6.2 Further Work
As indicated in section 3.3.3, the favourable installation solution for all floating concepts
seems to be onshore integration of substructures and towers and installation of turbine
components in protected waters, before wind turbines are towed to offshore sites. This
installation strategy has already been proven through installations of the Hywind and
WindFloat pilot turbines. Accordingly, a key focus while further developing floating concepts
may be to ensure possibilities for vertical towing operations, although development of
experimental installation methods focusing on reducing the number of vessels employed per
installed wind turbine involved should also be targeted.

Depending on the number of assumptions set prior to estimating certain CAPEX cost
elements, an increasing number of uncertainties exist. Uncertain elements include production
costs and installations processes for floating substructures, and, accordingly, costs related to
large-scale production and installation of floating concepts should be investigated in further
detail. This could mainly be through evaluation of automated welding costs computed from
detailed geometries in specialised production facilities, as well as costs associated with large-
scale lifting and installation operations performed using floating vessels.

Additionally, simplifications are set for how costs are assumed to change with increasing farm
sizes. Since farms size is a cost driver concepts seem highly sensitive to, any scale effects
should be investigated further to estimate an optimal farm size with regards to both economies
of scale, technical and logistical feasibilities and investment risks. Economies of scale could
potentially be realised through mutual sharing between developers, e.g. of facilities and
technologies for production, installation and operation.

Effects of water depth changes should be investigated further for all concepts. More accurate
substructure dimensions for bottom-fixed concepts and mooring line properties for floating
concepts should be calculated. This is especially important for the TLB concepts, which
suffer most from increased water depths due to stiffness requirements. Any possible concept
differences with respect to O&M operations should be investigated further. A generic and
simplified approach has been used to estimate costs related to detaching and towing wind
turbines to shore for repairs, and further and more thorough investigations of such costs could
reveal key differences in preferred maintenance strategies between concepts. Further
technological development should also be implemented in O&M estimations. As indicated in
chapter 5, LCOE values are highly sensitive to offshore distances. With reduced distances,
other transmission technologies (e.g. HVAC) would be expected to be employed, and cost
reduction potentials associated with such technologies relative to those presented in this thesis
should be investigated further.

Generally, costs should be investigated with further attention to detail based on their expected
impact on levelised costs of energy, given by Figure 94, as any relative changes in large cost
categories would indicate larger LCOE impacts than similar changes in less intrusive cost
categories. In general, main drivers for LCOE values may be attributed to turbine costs, grid
costs and O&M costs. Accordingly, focus should be set on both clarifying and reducing these
cost categories, through simulations, research and technological developments.

151
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Bochum: Stadtwerke Bochum. Available from: http://www.stadtwerke-
bochum.de/privatkunden/unternehmen/pressecenter/pressemeldungen/presseinfo_120

160
 626.-middleColumn-0059-
DownloadRef.tmp/STWBO%20WEA%20Alpha%20Ventus_Montage_Rotorstern_Qu
elle%20AREVA.jpg (read: 02.05.2013).
World Wind Energy Association. (2012a). 2011 Report. Bonn: World Wind Energy
Association.
World Wind Energy Association. (2012b). 2012 - Half-year report. Bonn: World Wind
Energy Association.
Zhang, D. (2013). Anchor chains. Shandong: Qingdao Wancheng Anchor Chain Co. Ltd.
Available from: http://www.alibaba.com/product-gs/308579509/steel_chain.html
(read: 01.05.2013).

161
 8. APPENDIX

8.1 Written Appendices

Appendix 1: List of Figures

Appendix 2: List of Tables

Appendix 3: Support Mechanisms for Renewable Energy

Appendix 4: Monetary Conversions

Appendix 5: Manufacturing Cost Additions

Appendix 6: Fibre Rope Mooring Line Costs

Appendix 7: Grid Connection

Appendix 8: Offshore Substation

Appendix 9: Installation Cost Examples, Floating Concepts

Appendix 10: Operation and Maintenance Costs

Appendix 11: Operation Phase Insurance Properties

Appendix 12: Cost Reduction Potentials

8.2 Digital Appendices

Digital Appendix 1: MS Excel LCOE Model
Digital Appendix 2: OMCE-Calculator Properties

162
Appendix 1
List of Figures
Figure 1: Hywind, the world's first megawatt scaled floating wind turbine ............................. V
Figure 2: Scenery illustration from Jiuquan Wind Power Base ................................................1
Figure 3: Global installed wind power capacity ......................................................................2
Figure 4: Map of the largest offshore wind farms of Northern Europe .....................................3
Figure 5: Global wind energy potential ...................................................................................4
Figure 6: Example of a Proposed European Super Grid ..........................................................5
Figure 7: Global surface temperature change over time ...........................................................6
Figure 8: Energy costs by source ............................................................................................7
Figure 9: European energy import dependency as of 2008 ......................................................8
Figure 10: Main support mechanisms across Europe ............................................................. 10
Figure 11: Turbine anatomy illustration, based on a Siemens 2.3 MW turbine ...................... 11
Figure 12: Rated capacity and rotor diameter for offshore wind turbines ............................... 12
Figure 13: Bottom-fixed substructures .................................................................................. 13
Figure 14: Spar, TLP and semi-submersible platform ........................................................... 14
Figure 15: Shipping density, Northern European oil and gas installations and existing ports
suitable to serve as bases for offshore energy installation and operation ................................ 17
Figure 16: Envisioned port for offshore wind energy operations ...........................................17
Figure 17: Axis system with corresponding translations and rotations ................................... 22
Figure 18: Iceberg of hidden costs, derived from .................................................................. 23
Figure 19: Levelised cost of energy model for a single site in a specific year ........................ 25
Figure 20: Illustration of the concepts ................................................................................... 28
Figure 21: Illustration of the TLB concept ............................................................................ 29
Figure 22: Models tested in wave tank .................................................................................. 30
Figure 23: TLB B and TLB X3 (1:40 scale) tested in Brest, France January 2013 ................. 30
Figure 24: Left (a): Hywind. Right (b): Hywind II vs. Hywind Demo ................................... 31
Figure 25: WindFloat illustration .......................................................................................... 32
Figure 26: SWAY illustration ............................................................................................... 33
Figure 27: Floating substructure stability triangle ................................................................. 34
Figure 28: Illustration of monopile- and jacket-based wind turbines ..................................... 35
Figure 29: Information about the fictive benchmark wind farm .............................................36
Figure 30: Wind speed distribution at site .............................................................................37
Figure 31: Turbine power curve ............................................................................................ 39
Figure 32: Capacity factors at Northern European sites, based on REpower 5M.................... 41
Figure 33: Relation between theoretical production, capacity factor and load factor .............. 42
Figure 34: Company types participating in wind farm supply chain ......................................44
Figure 35: Location of key players within the European wind energy industry ...................... 45
Figure 36: European price development of bunker fuel, 2006 - 2012..................................... 47
Figure 37: Shows Oleg Strashnov installing monopile .......................................................... 48
Figure 38: The self-propelled heavy lift crane vessel HLV Uglen ......................................... 49
Figure 39: KL Saltfjord ........................................................................................................ 50

I
Figure 40: Platform Supply Vessel illustration ......................................................................51
Figure 41: SWATH hull vessel illustration ...........................................................................52
Figure 42: Illustration of an offshore mother vessel .............................................................. 53
Figure 43: Life cycle phases for a wind farm project ............................................................. 55
Figure 44: Development and consenting cost breakdown ...................................................... 58
Figure 45: Total development and consenting costs and costs per MW ................................. 59
Figure 46: Cost breakdown for an offshore turbine ............................................................... 61
Figure 47: Rotor blade production ........................................................................................ 62
Figure 48: Parts of manufacturing processes for monopile structures .................................... 64
Figure 49: Parts of manufacturing processes for jacket structures..........................................65
Figure 50: Catenary system, vertical system and taut leg system ...........................................68
Figure 51: Different types of anchors .................................................................................... 68
Figure 52: Illustration of Drag Embedment Anchor .............................................................. 69
Figure 53: Top and side view of the Stevshark anchor .......................................................... 69
Figure 54: Illustration of a Suction Pile Anchor .................................................................... 70
Figure 55: Illustration of Vertical Load Anchor .................................................................... 70
Figure 56: Top and side view of the Stevmanta Vertical Load Anchor .................................. 71
Figure 57: Cross sectional area of generic fibre rope ............................................................. 73
Figure 58: Generic mooring chain......................................................................................... 73
Figure 59: Illustration of generic mooring wire ..................................................................... 74
Figure 60: SWAY tension leg and mooring connector .......................................................... 74
Figure 61: Floating concept illustration showing mooring system types ................................ 75
Figure 62: Cable length between each tower ......................................................................... 77
Figure 63: Inter-array cable structure chosen for the benchmark wind farm .......................... 78
Figure 64: Technology capabilities for power transmission ................................................... 79
Figure 65: 200 kV HVDC Extruded 1x1100 mm2 Submarine Cable ..................................... 80
Figure 66: BorWin Alpha ..................................................................................................... 81
Figure 67: Feda station ......................................................................................................... 82
Figure 68: Specialised vessel use: Feeding and transiting ...................................................... 84
Figure 69: Installation of a preassembled rotor at Alpha Ventus ............................................ 85
Figure 70: Vertical towing of complete wind turbines from shore to site ............................... 89
Figure 71: Envisioned large-scale installation of turbines onto WindFloat ............................ 89
Figure 72: Transport of floater from shoreo site .................................................................... 90
Figure 73: Towing of floater and tower configuration from shore to site ............................... 90
Figure 74: Towing of the WindFloat pilot project) ................................................................ 94
Figure 75: The figure to the left illustrates the DEA in the right loading mode and the figure to
the right illustrates the recovery method ............................................................................... 95
Figure 76: The figure to the left illustrates the verification of the right loading mode and the
figure to the right illustrates the recovery method of the Stevmanta VLA............................. 96
Figure 77: Left (a): Suction Pipe installation with ROV. Right (b): Pump detached from
installed SPA ........................................................................................................................ 96
Figure 78: Deck area consumption ........................................................................................ 97
Figure 79: Cable installation by Stemat Spirit at London Array ............................................ 99
Figure 80: Offshore substation installation by Rambiz at London Array ............................. 100

II
Figure 81: Bathtub curve .................................................................................................... 101
Figure 82: Schematic overview of the maintenance strategy ............................................... 102
Figure 83: Simplified schematic overview of how the maintenance effort over the lifetime of
an offshore wind farm can look like. ................................................................................... 103
Figure 84: Optimal number of failures allowed ................................................................... 104
Figure 85: Maintenance operation with the FOB SWATH 1 at Greater Gabbard ................. 106
Figure 86: Gangway system for mother vessel .................................................................... 108
Figure 87: Average wind farm availability per month ......................................................... 112
Figure 88: Breakdown of O&M costs ................................................................................. 113
Figure 89: Equipment cost breakdown ................................................................................ 114
Figure 90: The life cycle of a wind turbine ......................................................................... 116
Figure 91: Scrap Price Index - Demolition Scrap. ............................................................... 118
Figure 92: CAPEX per MW breakdown ............................................................................. 120
Figure 93: Concept levelised costs of energy at benchmark sites ......................................... 123
Figure 94: Baseline LCOE distribution breakdown ............................................................. 124
Figure 95: Life cycle LCOE distribution TLB B ................................................................. 125
Figure 96: Onshore LCOE trends from 1980 to 2012 .......................................................... 126
Figure 97: Installation of onshore wind turbine ................................................................... 127
Figure 98: LCOE changes with increasing farm sizes ......................................................... 129
Figure 99: LCOE changes with offshore distance ............................................................... 130
Figure 100: LCOE changes with changes in water depth..................................................... 133
Figure 101: LCOE changes with extended wind farm life spans.......................................... 134
Figure 102: Baseline concept levelised costs of energy at optimised wind farm locations ... 135
Figure 103: Baseline concept levelised costs of energy at optimised wind farm locations,
reduced uncertainties .......................................................................................................... 136
Figure 104: TLB B LCOE sensitivity ................................................................................. 137
Figure 105: TLB X3 LCOE sensitivity ............................................................................... 138
Figure 106: Hywind LCOE sensitivity ................................................................................ 138
Figure 107: WindFloat LCOE sensitivity ............................................................................ 139
Figure 108: SWAY LCOE sensitivity ................................................................................. 139
Figure 109: Monopile LCOE sensitivity ............................................................................. 140
Figure 110: Jacket LCOE sensitivity ................................................................................... 140
Figure 111: LCOE sensitivity to export cable numbers ....................................................... 141
Figure 112: LCOE sensitivity to turbine costs ..................................................................... 142
Figure 113: LCOE sensitivity to steel costs......................................................................... 143
Figure 114: LCOE sensitivity to vessel rates. ...................................................................... 145
Figure 115: LCOE sensitivity to load factors. ..................................................................... 146
Figure 116: LCOE sensitivity to discount rates. .................................................................. 147
Figure 117: LCOE sensitivity to contingency implementations. .......................................... 148
Figure 118: LCOE sensitivity to generic cost reductions. .................................................... 149

III
Appendix Figure 1: Manufacturing of the WindFloat pilot substructure ............................... XI
Appendix Figure 2: Diameter dependant cost estimations for fibre ropes ........................... XIII
Appendix Figure 3: Cost of mooring lines relative to water depths .................................... XIV
Appendix Figure 4: Voltage/current relation and power triangle for generator .................... XV
Appendix Figure 5: Power and current adding up .............................................................. XVI
Appendix Figure 6: Cable structure case 1 ....................................................................... XVII
Appendix Figure 7: Cable structure case 2 ....................................................................... XVII
Appendix Figure 8: Cable structure case 3 ....................................................................... XVII
Appendix Figure 9: Cable structure case 4 ...................................................................... XVIII
Appendix Figure 10: Estimated costs for a Voltage Source Converters excl. platform........XXI
Appendix Figure 11: Total substation cost distributions .................................................. XXIII
Appendix Figure 12: Simulated average failure rate per component ...............................XXVII
Appendix Figure 13: Average downtime breakdown ................................................... XXVIII
Appendix Figure 14: Spare material costs over simulation period ................................... XXIX
Appendix Figure 15: Spare part cost breakdown - condition-based maintenance .............. XXX
Appendix Figure 16: Average availability....................................................................... XXXI
Appendix Figure 17: Per MW O&M costs with increasing farm size .............................XXXII
Appendix Figure 18: Per MW O&M costs with increasing offshore distances................XXXII

IV
Appendix 2
List of Tables
Table 1: Comparison of different substructure systems ......................................................... 14
Table 2: Overview of the analysed concepts ......................................................................... 28
Table 3: Site assumptions for benchmark wind farm case ..................................................... 36
Table 4: Sea state and wave data: North Atlantic region........................................................ 37
Table 5: Properties for the generic 5 MW Turbine ................................................................ 38
Table 6: Baseline load factor ................................................................................................ 43
Table 7: Approximate day rates of different vessels for installation purposes ........................ 54
Table 8: Annual fixed costs for maintenance vessels ............................................................. 54
Table 9: Overview over cost components included in development and consenting .............. 56
Table 10: Development and consenting costs for a 500 MW offshore wind farm .................. 57
Table 11: Breakdown of the development and consenting costs ............................................ 58
Table 12: Construction phase insurance ................................................................................ 60
Table 13: Generic 5 MW offshore turbine costs .................................................................... 62
Table 14: Production cost estimates for bottom-fixed substructures ......................................65
Table 15: Production cost estimates for floating substructures .............................................. 67
Table 16: Advantages and disadvantages for offshore anchor types ......................................71
Table 17: Advantages and disadvantages for offshore mooring line types ............................. 72
Table 18: Total benchmark length of mooring lines for each concept. ................................... 76
Table 19: Floating concept mooring system acquisition costs per wind turbine ..................... 76
Table 20: Estimated installation costs for monopile wind turbines ........................................ 87
Table 21: Estimated installation costs for jacket wind turbines.............................................. 87
Table 22: Concept-depending speeds and operational windows for AHTS vessels ................ 91
Table 23: Offshore lifting operation qualities ........................................................................ 92
Table 24: Offshore lifting operation time consumption and operational windows ................. 93
Table 25: Per wind turbine concept installation cost estimates for the evaluated strategies .... 94
Table 26: Mooring system installation cost estimates ............................................................ 98
Table 27: Advantages and disadvantages of the different maintenance types....................... 104
Table 28: Fixed annual labour costs for the benchmark farms ............................................. 109
Table 29: Number of maintenance events per year averaged over wind farm life cycles ...... 111
Table 30: Total downtime per year ..................................................................................... 111
Table 31: O&M costs per year ............................................................................................ 112
Table 32: Decommissioning costs as a percentage of the related installation costs .............. 117
Table 33: Expected approximate decommissioning costs per MW ...................................... 118
Table 34: Expected approximate decommissioning costs per MW ...................................... 118
Table 35: Concept CAPEX costs per MW .......................................................................... 119
Table 36: Concept CAPEX costs per MW .......................................................................... 119
Table 37: OPEX per MW ................................................................................................... 121
Table 38: DECEX per MW................................................................................................. 121
Table 39: DECEX per MW................................................................................................. 121
Table 40: Distribution of CAPEX costs .............................................................................. 122

V
Table 41: Depth-dependent concept mooring line consumption per wind turbine ................ 132
Table 42: Steel Consumption Footprint ............................................................................... 144
Table 43: Employed cost reduction potentials ..................................................................... 148

Appendix Table 1: Incentive strategies in Europe ............................................................... VII

Appendix Table 2: Incentive strategy advantages and disadvantages.................................. VIII
Appendix Table 3: Conversion rates and index values ......................................................... IX
Appendix Table 4: Production cost estimates for floating substructures ............................... XI
Appendix Table 5: Dyneema mooring line properties ......................................................... XII
Appendix Table 6: Cost estimations, fibre ropes ................................................................ XIII
Appendix Table 7: REpower 5M data ................................................................................. XV
Appendix Table 8: Export cable......................................................................................... XIX
Appendix Table 9: Ratio between the farm size and number of substation .......................... XX
Appendix Table 10: Estimated costs for a Voltage Source Converters excl. platform .......... XX
Appendix Table 11:Offshore substation platform cost estimates ........................................XXI
Appendix Table 12: Estimated total offshore substation costs ............................................ XXI
Appendix Table 13: Estimated total floating offshore substation costs ............................. XXII
Appendix Table 14: Total estimated baseline costs for substations ................................... XXII
Appendix Table 15: Installation cost calculation example: Hywind, three turbine lifts .... XXIV
Appendix Table 16: Concept installation costs for towing of complete wind turbines ...... XXV
Appendix Table 17: Concept installation costs for towing floaters or floater and tower
configurations .................................................................................................................. XXV
Appendix Table 18: Installation cost calculation example: WindFloat ............................ XXVI
Appendix Table 19: Per trip costs associated with towing wind turbines to shore for
maintenance ................................................................................................................ XXXIII
Appendix Table 20: Annual O&M costs, towing wind turbines to shore ...................... XXXIV
Appendix Table 21: Annual O&M costs, expensive crane vessels................................. XXXV
Appendix Table 22:Annual O&M costs, no mother vessel ........................................... XXXVI
Appendix Table 23: Operations phase insurance ......................................................... XXXVII
Appendix Table 24: Cost reduction opportunities and implied learning rates. ............XXXVIII

VI
Appendix 3
Support Mechanisms for Renewable Energy
Appendix Table 1 is a summary of offshore wind operating support mechanisms currently in
use across Europe, while Appendix Table 2 shows key advantages and disadvantages
associated with the incentive strategies.

Appendix Table 1: Incentive strategies in Europe (Navigant Consulting Inc 2013)

Country Primary Incentive Strategy Notes

- Separate green certificate markets in Brussels, Flanders,
Green certificates with floor
Belgium and Wallonia plus federal obligations
price (i.e., Feed-in Premium)
- Offshore wind is supported at the federal level.
Premium FiT for land-based
wind, tender scheme for - Premium duration 22 000 peak load hours (nine to ten
Denmark
offshore wind, and fixed FiTs years)
for others
- 12-year tariff
Finland FiT - “Sprinter Bonus” (i.e., additional tariff) for projects built in
the first 3 years
FiT and tender for large - Offshore wind 1.9 GW allocated in tenders in April 2012
France
projects at tariffs in the 17-20 cEUR/MWh range
- Offshore wind 20-year FiT with annual digression of 7%
starting from 2018
Germany FiT - Offshore tariff at 15 cEUR/kWh for 12 years, or 19
cEUR/kWh for 8 years, plus extra period at 15 cEUR/kWh
depending on distance and depth
- Offshore wind 0.14 cEUR/kWh - 15 years capped at 1.5
Ireland FiT
GW
- Projects of 5 MW and larger based on average lifetime of
Italy Tendering with floor price plants
- Not yet approved
- Premium capped at 14.4 cEUR/kWh for offshore wind and
Netherlands FiT via CfD 7.6 cEUR/kWh for land-based wind
- Duration 15 years
Norway Green Certificates - Green certificates at 2.16 cEUR/kWh in 2011
- Minimum price based on formula
Poland FiT and quota obligation - 10.4 % of all energy produced should be from renewable
sources
FiT (subject to ongoing
Portugal - Licensing of all RE projects suspended
review)
FiT (subject to ongoing - Moratorium on subsidies for all RE capacity not already
Spain
review) approved
Market spot price + green
Sweden - Offshore wind GC + Premium until 2030
certificates
- Quotas increase until 2037
- 2 ROCS for offshore wind
Green certificates (”ROCs”)
U.K. - Buyout price set by government (penalty for utilities not
Under review (EMR)
reaching quota) with such penalties recycled to producers’
pro rata production

VII
Appendix Table 2: Incentive strategy advantages and disadvantages (Navigant Consulting Inc 2013)

Advantages Disadvantages Lessons Learned

- Applies to actually produced - Can encourage over- - Should be guaranteed for
Feed-in Tariff (FiT) and Feed-in Premium

electricity, avoiding windfall investment if prices are set at long durations to spread costs
effects, generally favoring the too generous levels, leading to over enough volume
most productive sites. windfall effects. - Rates to new entrants should
- Encourages owners to conduct - Can be hard to determine the reduce over tim to support
long-term O&M right level of a FiT/FiP to technological improvement.
- Ultimately paid by electricity obtain the maximum amount - Projects should not be
consumers and not by of green electricity with a allowed to switch to market
(FiP)

taxpayers, ensuring a logical minimum amount of subsidies. prices during the FiT period,
burden allocation - FiP flows less stable than in order for the public to keep
- Can provide the public with a FiT equivalents due to the full benefit of the price
long-term hedge against electricity price dependency hedge against increased
increasing power prices. energy prices.
- Least expensive and most - Administrative burdens
effective way to build up need to be considered.
renewable energy capacity if
the program is designed and
implemented well.
- Is market-based and thus - Prices of green certificates - A minimum price for the
“technology neutral.” Allows can be highly volatile due to green certificates appears to
competition between different uncertainty in future be necessary in immature
renewable energy technologies obligations and supply. markets to insure investment
through the price for the green - Makes investors carry security.
certificates and should in theory significant volume risk, - The obligation quota should
Quotas / Green Certificates

lead to the least expensive discouraging investment, or be set with a long time
technologies being put in generates windfall revenues horizon in order to stimulate
service to reach the desired for utilities. investment in the supply
quota. - Project delays may lead to chain.
- Quotas can be adjusted over quota price increments, - Generally, green certificate
time, giving policymakers a leading to quotas not reached. regimes lead to higher costs
more direct tool to control the - Generally, green certificate for consumers, confusion
level of investment in regimes lead to higher costs amongst investors,
renewable energy. for consumers, confusion politicians, and the public,
amongst investors, politicians, and less political support.
and the public, and less - Difficult for new and
political support. unproven technologies to
penetrate the market.

- Visibility on renewable energy - Depending on the level of - A penalty for non-

investment volumes and future competition, prices may or compliance to the contracted
production may not be aligned with the tender should be implemented
- Visibility on cost for the regulator’s expectations. to avoid low bids that are not
Tendering

regulator - Once the regime is allocated feasible in the end.

- Competition between bidders to an investor or set of Important to have a balanced
that should ensure the lower investors, the government has volume allocated in each
cost options are developed no certainty that the tendering round. When the
investment will actually take total volumes tendered are too
place; investors can change high, there will be limited
their minds or meet adverse competition and high prices.
circumstances.

VIII
Appendix 4
Monetary Conversions
Currency conversion
Monetary values are converted to Euro values at source publication year using annualised
average conversion rates by the following relation:

(I)

Where:
€t denotes Euro cost converted from foreign currency at time t of source
Vt denotes the monetary value stated in foreign currency at time t
Xt denotes currency conversion cost between Euros and foreign currency at time t
t denotes the time of source publication

Inflation
After conversion to Euros (at the time of the source publication, given that source does not
state monetary values in Euros), all values are inflated to present day values using EU-15
Total Industrial Producer Price Indices by the following relation:

(II)

Where:
€2013 denotes present day Euro values
€t denotes Euro cost converted from foreign currency at time t of source
I2013 denotes the present day Total Industrial Producer Price Index (122.30, 2005 = 100)
It denotes the Total Industrial Producer Price Index of time t of source
t denotes the time of source publication

Appendix Table 3: Conversion rates and index values

Year USD1 GBP1 NOK1 PPI Index2

2013 1.33 0.83 7.38 122.30
2012 1.29 0.81 7.48 122.28
2011 1.39 0.87 7.79 119.50
2010 1.33 0.86 8.01 112.78
2009 1.39 0.89 8.73 109.03
2008 1.47 0.80 8.23 113.59
2007 1.37 0.68 8.01 106.85
2006 1.26 0.68 8.04 104.56
2005 1.25 0.68 8.01 100.00
2004 1.24 0.68 8.37 95.96
2003 1.13 0.69 8.00 94.10
1) (Oanda Corporation 2013)
2) (Eurostat 2013)

IX
Appendix 5
Manufacturing Cost Additions
As indicated in section 3.2.2, an approximate ratio of total production costs and material costs
of turbine towers could be estimated at 3:1 given our baseline bulk steel costs and overall
tower costs indicated as an average value of generic sources, shown in Table 13. This total
estimated production cost supports indications of (de Vries 2011).

As for production costs for bottom-fixed substructures, an addition of approximately 100 %

on monopile material costs is indicated (de Vries 2011; Faaij & Junginger 2004), while an
addition of 300-500 % on jacket material costs is suggested (Borgen 2010; de Vries 2011).
These are based on large-scale production in a rather mature industry, but bottom-fixed
substructure design depend on special adaptation to site, not only to the general wind farm
site, but also to the benthic conditions of the installation site assigned to each individual wind
turbine (Jensen 2010). Accordingly, bottom-fixed substructures have to be individually
engineered, and may be regarded as not completely mass-produced.

For floating substructure production in a future, mature industry, a broader standardisation of

designs may be expected, leading to assumptions on some cost reductions of manufacturing
costs through mass productions. However, floating substructures often contain stiffeners
leading to complex manufacturing processes.

For this thesis, the expected complexity of the evaluated floating concept substructures are
discussed with advisor Anders Myhr. This appendix contains some of the key points stated
during the discussions.

Hywind
Statoil suggests a 100 % addition on material costs from materials that have experienced some
coarse modifications (Byklum 2013). The baseline steel costs indicated in this thesis may be
regarded somewhat liberal with modifications in mind, and the expected complexity of the
structure (e.g. from stiffeners, diameter transitions, sealing lids and mooring line mounts)
leads to a suggestion to set manufacturing costs to 120 % of baseline material costs.

TLB B / TLB X3
The TLB B bears physical resemblances to the Hywind concept. However, the reduced steel
weight leads to potentially easier handling, and manufacturing cost additions are accordingly
set somewhat lower, to 110 %. The TLB X3 concept is expected to be slightly more complex
with regards to manufacturing processes due to transitions between the small transition pipes,
the floater component and the tower transition peace. Resultantly, additions are set to 130 %.

WindFloat
The WindFloat concept is both large and expected to be highly complex to manufacture, with
stiffeners and heave compensation. (Borgen 2010) suggests an addition of 480 % on material
costs, but due to possibilities of large-scale dry-dock production, this is considered too much
of a conservative estimate. Accordingly, additions are set to 200 %.

X
SWAY
The SWAY concept is not completely symmetrical, and with changes in diameters and wall
thicknesses (Jorde 2013), in addition to yaw systems and tension rods, manufacturing costs
additions are set to 150 %, corresponding with estimates by (Borgen 2010)

Total baseline production costs are summarised in Appendix Table 4.

Appendix Table 4: Production cost estimates for floating substructures

Concept TLB B TLB X3 Hywind II WindFloat SWAY

Material consumption (costs) 4451 5211 1 7002 2 5003 1 1004
Material costs € 445 000 € 521 000 € 1 700 000 € 2 500 000 € 1 100 000
Manufacturing costs addition 110 %5 130%5 120 %2.5 200 %5.6 150 %6
Manufacturing costs € 489 500 € 677 300 € 2 040 000 € 5 000 000 € 1 650 000
Total production costs € 934 500 € 1 198 300 € 3 740 000 € 7 500 000 € 2 750 000

1) Source: (Myhr & Nygaard 2012)

2) Source: (Byklum 2013)
3) Source: (Weinstein 2009)
4) Source: (Jorde 2013)
5) Source: (Myhr 2013)
6) Source: (Borgen 2010)

Appendix Figure 1: Manufacturing of the WindFloat pilot substructure

XI
Appendix 6
Fibre Rope Mooring Line Costs
Two main requirements have to be fulfilled for all mooring lines used in taut leg mooring
systems:

1) The mooring lines have to have a minimum breaking load of at least 1 800 tons,
whereof 1 000 tons come from substructure excess buoyancy, and 800 tons from load
amplitudes induced by wave and wind loads, currents etc. (Myhr 2013)
2) Mooring line stiffnesses, i.e. the product of cross section area and elastic modulus in
relation to mooring line length has to exceed minimum set values for all applicable
depths. These required minimum stiffness values are 8 · 106 N/m for the upper mooring
lines and 5.6 · 106 N/m for the lower mooring lines. (Myhr 2013)

To serve as basis for the cost analyses, per m costs for certain dimensions of Dyneema SK75
fibre mooring lines are gathered, based on information from (Shahid 2013). These costs are
presented in Appendix Table 5.

Appendix Table 5: Dyneema mooring line properties

Diameter (mm) Minimum Break Load (tons) Per m cost (€2013)

168 1 800 602
200 2 540 893
264 4 420 1 790

As indicated, all mooring lines are expected to have diameters of at least 168 mm to maintain
breaking load requirements. Based on minimum TLB concept depths set to 75 m, and 100 m
depth increments from 100 m to 500 m, mooring line consumptions are calculated.

From an expected Dyneema SK75 modulus of elasticity of 113 GPa (DSM Dyneema 2009),
it is investigated whether 168 mm mooring lines are sufficient for use at desired depths. If not,
minimum necessary mooring line diameters and corresponding expected costs are calculated.
These costs are based on assumptions that line diameters may be made to order given demand
for severe lengths, and that diameter dependent costs may be estimated from a power function
found through simple regression analyses performed on the data points using MS Excel.
Diameter dependant per m cost developments and corresponding power function estimations
are presented in Appendix Figure 2. These indications are assumed valid in an approximate
diameter region from 168 mm to 264 mm.

XII
 Appendix Figure 2: Diameter dependant cost estimations for fibre ropes used for TLB concepts

Appendix Table 6 shows mooring line cost estimates per m of upper or lower mooring line at
different water depths.

Appendix Table 6: Cost estimations, fibre ropes

Depth (m) 75 100 200 300 400 500

Mooring line length (m) 141 177 318 460 601 743
Stiffness (N/m) 1.8 · 107 1.4· 107 7.9· 106 5.4 · 106 4.2 · 106 3.4 · 106
Upper
168 mm line OK? Yes Yes No No No No
line
Required diameter (mm) - - 169.4 203.5 232.8 258.7
Estimated per m cost (€2013) 602 602 617 963 1 332 1 720
Mooring line length (m) 103 135 270 410 551 692
Stiffness (N/m) 2.4 · 107 1.9· 107 9.3 · 106 6.1 · 106 4.5 · 106 3.6 · 106
Lower
168 mm line OK? Yes Yes Yes Yes No No
line
Required diameter (mm) - - - - 186.4 208.9
Estimated per m cost (€2013) 602 602 602 602 778 1 025

Based on the mooring line consumption at different water depths, the relation between water
depth and mooring line costs per wind turbine of the TLB concepts are presented in Appendix
Figure 3. As indicated, with increasing depths, both mooring line consumption and mooring
line costs per m increase, and accordingly, with increasing depths, an almost exponential total
mooring line cost development is expected with increasing water depths.

XIII
Appendix Figure 3: Cost of mooring lines relative to water depths

Please note that uncertainties exist with regards to the viability of use of Dyneema fibre ropes
for permanent, taut leg mooring systems due to creep properties, and presently, polyester
ropes are frequently used for permanent moorings, although not showing the same stiffness
properties as Dyneema ropes (Shahid 2013). However, the thesis is delimitated towards
problems associated with mooring creep through assumptions that these may be adequately
addressed with future technologies, either through further development of the actual mooring
line properties or through development of systems capable of counteracting mooring line
creep.

XIV
Appendix 7
Grid Connection
This appendix comprises information relevant for estimating costs associated with grid
connections.

Electrical Losses
Electricity generating data for the REpower 5M, on which the generic 5 MW turbine deployed
in the thesis is based, is shown in Appendix Table 7 below.

Appendix Table 7: REpower 5M data (REpower Systems 2011)

REpower 5M data
Generator type Double-fed asynchronous, 6-pole
Generator power 5075 kW
Output voltage 660 V
Speed 750-1170 rpm
Gear ratio 1:97

According to (Wildi 2006), a double-fed asynchronous motor run as a generator behaves like
a synchronous generator as the generator provides itself with reactive power needed to
magnetise the stator. This leads to no phase offset between the voltage E and the current I,
giving a phase angle φ of 0°, thus resulting in no reactive power Q delivered to the grid, while
the apparent power S equals the rated, active power P.

Appendix Figure 4: Voltage/current relation and power triangle for double-fed asynchronous generator

Appendix Figure 4 illustrates the relationship between power P, current I and voltage E for a
certain rated power fed from a three-phase generator G through a transformer onto a direct-
current grid at rated voltage.

The voltage and current before reaching the transformer are irrelevant for power loss
calculations. If the transformer ups voltage to 33 kV, assuming rated power of 5000 kW and
no transformer power losses, grid current can be found using the following relations, keeping
in mind apparent power S and active power P are equal:

√ (III)

(IV)
√ √

These currents and voltages are shown in the upper right part of Appendix Figure 5.

XV
When power from multiple generators are fed onto the same grid, grid voltage must stay the
same, requiring grid current to increase with the same factor as power increase, obvious from
the power to voltage and current relation shown above. This is demonstrated in the one-line-
diagram in Appendix Figure 5.

Appendix Figure 5: Power and current adding up

Current losses in a cable are given by:

(V)
where:
Ploss denotes ohmic power losses
I denotes grid current
R denotes cable resistance
The resistance is calculated through:

(VI)

Where:
ρ denotes material-specific electrical resistivity (for this thesis set to copper resistivity, 1,75 ·
10-8 Ωm)
l denotes the cable length
A denotes the cable cross-sectional area

Combinations of these relations show that ohmic losses in a homogenous cable grid at given
voltage depends solely on cable length and cable current, which in turn depends on added
power.

The mentioned power loss qualities are derived from three-phase circuit calculation, but are
also relevant for ohmic losses in single-phase DC circuits.

XVI
Inter-array Cable Structures
Four possible inter-array cable structures are presented, with associated costs further
introduced in Digital Appendix 1.

Inter-array cable properties

Total cable length 191.6 km
33 kV cobber cable
Cable type
(300 mm2)
Max power* 500 MW
Max percentage
0.68 %
power loss
Average power* 224MW
Average
percentage power 0.31 %
loss
* Transmitted within the farm

Appendix Figure 6: Cable structure case 1

Inter-array cable properties

Total cable length 171.9 km
33 kV cobber cable
Cable type
(300 mm2)
Max power* 500 MW
Max percentage
1.11 %
power loss
Average power* 224MW
Average
percentage power 0.50 %
loss
* Transmitted within the farm

Appendix Figure 7: Cable structure case 2

Inter-array cable properties

Total cable length 172.0 km
33 kV cobber cable
Cable type
(300 mm2)
Max power* 500 MW
Max percentage
1.11 %
power loss
Average power* 224MW
Average
percentage power 0.50 %
loss
* Transmitted within the farm

Appendix Figure 8: Cable structure case 3

XVII
 Inter-array cable properties
Total cable length 175.8 km
33 kV cobber cable
Cable type
(300 mm2)
Max power* 500 MW
Max percentage
2.07 %
power loss
Average power* 224MW
Average
percentage power 0.93 %
loss
* Transmitted within the farm

Appendix Figure 9: Cable structure case 4

Of the discussed cable structures, case 1 is decided as the favourable solution as the
associated costs from cable acquisition and installation, combined with maximum loss costs
based on an expected real wholesale value of €2013 45 per MWh (European Commission
2012b) are expected to be lowest for this solution, shown in Digital Appendix 1. Additionally,
this case is expected to be safest with regards to possible cable failures, as any potential
failures could only lead to downtime for five turbines.

Choice of Export Cable

One central question when finding export cable costs comes is whether one or two cables are
to be installed. Use of two cables reduces the expected farm downtime due to cable failures,
as power could be distributed through one cable if the other were to fail, but also significantly
increases capital costs from cable acquisition and installation. Additionally, use of two cables
is expected to impact the preferred rating of the cable with regards to e.g. voltage, cross-
sectional area etc.

When evaluating the rating and quantity of export cables to be deployed for our benchmark
farms, the discounted additional cost associated with purchase and installation of two cables
instead of one have been weighted against associated ohmic losses and downtime losses due
to cable failure, and their quantified costs.

Capital costs have been found using benchmark acquisition costs presented in Appendix
Table 8, while installation costs are evaluated as €2013 590 000 per km for single cable
installation, and €2013 1 062 000 per km for double cable, double trench installation. Maximum
ohmic losses costs are quantified through finding the dissipated losses from variables such as
transferred power, voltage, cable length, resistivity and cross-sectional area, before assigning
a real wholesale value of €2013 45 per MWh to the losses (European Commission 2012b).

Expected downtimes are found from assumptions that the annual failure rate of subsea cables
equals 0,1 failures per 100 km of cable (CIGRE 2009a), and that these on average take
approximately two months to repair (CIGRE 2009b). For two cables, the probability for two

XVIII
failures occurring at once, leading to complete downtime of the park, is found through
evaluating individual cable failure probabilities as independent probabilities.

The attached MS Excel LCOE model (Digital Appendix 1) estimates low case discounted
costs of cable acquisition and installation, maximum ohmic losses and downtime losses to
approximately €2013 346 million for benchmark use of two 1200 mm2, 150 kV HVDC extruded
cables, and approximately €2013 226 million for the use of one single 1500 mm2, 320 kV
extruded HVDC cable. Accordingly, one cable is chosen for our benchmark farms.

Export Cable Costs

Appendix Table 8 presents acquisition costs for HVDC power cables.

Appendix Table 8: Export cable (National Grid 2011)

Export Cable* Low Base High

150 kV, 1200 mm 2
€ 236 000 € 354 000 € 472 000
150 kV, 1500 mm2 € 295 000 € 384 000 € 472 000
150 kV, 1800 mm2 € 354 000 € 443 000 € 531 000
150 kV, 2000 mm2 € 354 000 € 472 000 € 590 000
320 kV, 1200 mm2 € 354 000 € 443 000 € 531 000
320 kV, 1500 mm2 € 354 000 € 443 000 € 531 000
320 kV, 1800 mm2 € 354 000 € 472 000 € 590 000
320 kV, 2000 mm2 € 413 000 € 531 000 € 649 000
400 kV, 1500 mm2 € 413 000 € 531 000 € 649 000
400 kV, 1800 mm2 € 472 000 € 561 000 € 649 000
400 kV, 2000 mm2 € 472 000 € 590 000 € 708 000
400 kV, 2500 mm2 € 590 000 € 708 000 € 826 000
500 kV, 1500 mm2 € 472 000 € 561 000 € 649 000
500 kV, 1800 mm2 € 472 000 € 590 000 € 708 000
500 kV, 2000 mm2 € 472 000 € 620 000 € 767 000
500 kV, 2500 mm2 € 590 000 € 738 000 € 885 000

* 150 - 320 kV is HVDC Extruded Subsea Cable and 400 - 500 kV

is Mass Impregnated Insulated Subsea Cable.

XIX
Appendix 8
Offshore Substation
A complete HVDC substation includes AC switchgear, transformers, converter electronics
and filters. The specific components that will be required to increase the voltage prior to
exporting the power to shore in best possible way, is highly farm specific and will not be
discussed in this thesis. However, the main cost drivers for the substation are assumed to be
the converter and the substation platform, while other components are assumed to relative
low. The converter is assumed to be based on Voltage Source Converters (VSC) technology
and the largest VSC system installed today is the BorWin2 platform with a rating of 800 MW
(Siemens 2012b). Within the commissioning date of our proposed wind farm, the rating of a
VSC system is assumed to exceed 1 000 MW (National Grid 2011), making this a maximum
rating for one single substation. For wind farms with a total power rate beyond this rating, it is
assumed that the farm needs more than one substation. Appendix Table 9 shows the assumed
ratio between the farm size and number of substation needed.

Appendix Table 9: Ratio between the farm size and number of substation

Number of Number of substation

Power rate
turbines 500 MW Substation 1 000 MW Substation
100 500 MW 1
200 1 000 MW 1
300 1 500 MW 1 1
500 2 500 MW 1 2
1 000 5 000 MW 5

With increasing farm sizes, it is assumed that farms are composed of 100 wind turbine
clusters, leading to assumptions that the inter-array cable consumption is proportional to farm
size. Added number of clusters assigned to several substations indicate the presence of
increasing lengths of export cable. However, logistical operations with regards to farm
positioning, e.g. through making the maximum distance to the clusters our benchmark
distance leads to assumptions that costs from further export cable laying negligible.

Appendix Table 10 shows estimated costs for a future VSC technology.

Appendix Table 10: Estimated costs for a Voltage Source Converters excl. platform (National Grid 2011).
Numbers in €2013

Specifications Unit cost - Low Unit cost - High

500 MW, 300 kV € 76 657 000 € 94 347 000
850 MW, 320 kV € 100 244 000 € 123 831 000
1250 MW, 500 kV € 123 831 000 € 153 314 000
2000 MW, 500 kV € 147 417 000 € 200 488 000

XX
Appendix Figure 10: Estimated costs for a Voltage Source Converters excl. platform (National Grid 2011)

The price estimate presented in Appendix Table 10 seems to follow a logaritmic function, as
shown in Appendix Figure 10. For a converter with rating of 500 MW, the costs is assumed to
be €2013 76.6 – 94.3 million. Based on the logoaritic function in Appendix Figure 10, the cost
for a converter with rating of 500 MW is assumed to be €2013 111.2 - 141.8 million.

To calculate the costs for a platform capable for a 500 MW VSC system, a linear relationship
between the price estimates and the platform size is assumed, presented in Appendix Table
11.

Appendix Table 11:Offshore substation platform cost estimates (National Grid 2011)

400 MW, ±300 kV, 3 500 ton 1 000 MW,±500 kV, 8 000 ton
Components
Low High Low High
Topside € 33 022 000 € 38 918 000 € 70 760 000 € 94 347 000
Jacket € 9 435 000 € 12 973 000 € 23 587 000 € 29 483 000
Installation € 18 869 000 € 23 587 000 € 31 842 000 € 41 277 000
Total costs € 61 326 000 € 75 478 000 € 126 189 000 € 165 107 000

Seeing the converter and the substation platform as the main cost drivers for a substation, total
acquisition costs for 500 MW and 1000 MW bottom-fixed substations are presented in
Appendix Table 12.

Appendix Table 12: Estimated total offshore substation costs

500 MW bottom-fixed substation 1 000 MW bottom-fixed substation

Components
Low High Low High
VSC € 76 657 000 € 94 347 000 € 111 256 000 € 141 837 000
Topside € 39 312 000 € 48 156 000 € 70 760 000 € 94 347 000
Jacket € 11 794 000 € 15 725 000 € 23 587 000 € 29 483 000
Installation € 21 031 000 € 26 535 000 € 31 842 000 € 41 277 000
Total costs € 148 794 000 € 184 763 000 € 126 189 000 € 165 107 000

Seeing as little information on floating substations exist, the offshore substation defined in
this thesis is decided to be placed on a generic floater, so the substation floater concept is not

XXI
influenced by changes in wind turbine floater concepts. It is assumed that the technology for a
floating substation will exist when the floating wind industry is mature enough. It is
conservatively assumed that locating the substation on a semi-submersible platform similar to
the WindFloat concept is the most feasible solution, as semi-subs may be regarded the most
stable floating substructure of the discussed concepts, minimising the risks of substation
malfunction. Based on assumptions that the production costs of jackets and floaters are
proportional to their carried load, production costs for semi-submersible platforms (Table 14)
for floating 500 MW substructures are assumed to be roughly 236 % those of their bottom-
fixed (Table 15) equivalents. Total installations costs for jacket-based wind turbines (Table
21) seem to be approximately 22 % more expensive than total costs for mooring system
acquisition, mooring system installation and float-out installation of WindFloat wind turbines
(Table 19, Table 25 and Table 26). Accordingly, total acquisition costs for 500 MW and 1000
MW floating substations are presented in Appendix Table 13.

Appendix Table 13: Estimated total floating offshore substation costs

500 MW floating substation 1 000 MW floating substation

Components
Low High Low High
VSC € 76 657 000 € 94 347 000 € 111 256 000 € 141 837 000
Topside € 39 312 000 € 48 156 000 € 70 760 000 € 94 347 000
Jacket € 27 816 000 € 37 087 000 € 55 630 000 € 69 535 000
Installation € 16 411 000 € 20 706 000 € 24 847 000 € 32 210 000
Total costs € 160 196 000 € 200 296 000 € 262 493 000 € 337 929 000

It is assumed that the baseline price estimates for the bottom-fixed and floating substations is
the average of the high and low estimates presented in Appendix Table 12 and Appendix
Table 13. The ratio between the farm size and number of substation needed is presented in
Appendix Table 9, which gives the total baseline costs of substation presented in Appendix
Table 14 and Appendix Figure 11.

Appendix Table 14: Total estimated baseline costs for bottom-fixed and floating substations

Number of Bottom-fixed Floating

Power rate
turbines substation substation
100 500 MW € 166 779 000 € 180 247 000
200 1 000 MW € 272 196 000 € 300 213 000
300 1 500 MW € 438 975 000 € 480 460 000
500 2 500 MW € 711 171 000 € 780 673 000
1 000 5 000 MW € 1 360 980 000 € 1 501 065 000

XXII
Appendix Figure 11: Total substation cost distributions

XXIII
Appendix 9
Installation Cost Examples, Floating Concepts
Here, examples of installation cost calculations for floating wind turbine concepts are shown,
depending on installation strategy. Remaining cost calculations are presented in Digital
Appendix 1.

Towing of Complete, Vertical Wind Turbines (Strategy 1)

Here, concept installation costs for vertical towing of wind turbines assembled near shore
(Figure 70) will be evaluated, depending on turbine lift categories.

This installation strategy is based on assumptions that floaters are launched from quay,
evaluated as one quayside lift. Two tug boats transport the floater near a crane barge, where
the tug boats up-end the floater. Turbine components are lifted from a quayside mobile crane
onto a barge towed by a tug boat, which transports the carrying barge to the near-shore crane
barge. A total of two tug boats assist the crane barge during lifting operations. The tower may
either be lifted by the crane barge, or preassembled onto the floater during the production
process. After lifting operations are completed, the wind turbine is towed to offshore site and
connected to mooring system using an AHTS and two tug boats.

One example of installation cost calculations are shown in Appendix Table 15, where near-
shore installation costs of Hywind wind turbines through three lifting operations are shown:

Appendix Table 15: Installation cost calculation example: Hywind, three turbine lifts

Vessel type Operation Value Duration Unit cost OW Total cost

Lifting operations
Quayside crane Quayside lifts 4.00 0.08 € 6 000 75 % € 2 667
Rigging 0.08 75 % € 6 111
Ballast 1.00 1.00 € 55 000 60 % € 91 667
Crane barge
3 near-shore lifts 0.63 72 % € 47 676
Personnel usage 30.0 0.63 € 370 72 % € 9 622
Loading, Assistance and Transportation
Loading 0.33 75 % € 15 111
Up-ending 0.50 60 % € 22 667
Tug boats Assistance 2.00 0.63 € 17 000 72 % € 29 473
Transportation 1.80 54 % € 113 324
Mooring 0.75 55 % € 46 364
Transportation 1.80 54 % € 303 309
AHTS 1.00 € 91 000
Mooring 0.75 55 % € 124 091
Total installation cost per wind turbine € 812 081

Appendix Table 16 summarises concept installation costs for complete, near-shore assembly,
depending on turbine lift strategy. These costs also include assigned mobilisation lump sums.

XXIV
Appendix Table 16: Concept installation costs for towing of complete wind turbines. All values in € 2013

Strategy TLB B/TLB X3 Hywind WindFloat SWAY

1A € 859 848 € 878 275 € 736 319 € 746 7831
1B € 817 737 € 836 164 € 699 874 € 704 672
1C € 798 585 € 817 011 € 680 722 € 685 5191
1D € 767 969 € 786 396 € 644 440 € 654 904
1E € 803 657 € 822 083 € 680 127 € 690 5911
1) Debatable due to floater/tower integration of SWAY concept

As indicated in the table, a lift strategy of two lifts; nacelle and preassembled rotor positioned
onto a preassembled floater and tower configuration is preferred for all concepts when
evaluating near-shore installation. This is mainly due to the fact that this lift strategy reduces
lift time relative to individual blade lifts significantly, while operational windows still exceed
those for a single lift of the turbine. The WindFloat and SWAY concepts seem most
reasonable to tow, due to their stability.

Towing of Floater or Floater and Tower Configuration (Strategy 2)

Here, concept installation costs for towing of floaters or preassembled floater- and tower
configurations, as seen in Figure 72 and Figure 73, are evaluated.
This installation strategy is based on the assumption that floaters or floater- and tower
configurations are launched and then towed to site, up-ended and moored using an AHTS
assisted by two tug boats. At site, a crane vessel handles ballast and remaining lift operations.
The crane vessel is assisted by both an AHTS and tug boats, and also a PSV responsible for
transport of turbine components.

Appendix Table 17 summarises concept installation costs for towing of floater and tower
configurations, depending on turbine lift strategy, including mobilisation costs:

Appendix Table 17: Concept installation costs for towing floaters or floater and tower configurations. All values
in €2013

Strategy TLB B/TLB X3 Hywind WindFloat SWAY

2A € 2 082 187 € 2 825 295 € 2 737 861 € 2 729 9471
2B € 1 952 078 € 2 701 793 € 2 555 177 € 2 585 035
2C € 1 585 020 € 2 328 128 € 2 240 693 € 2 232 7801
2D € 1 307 908 € 2 040 038 € 1 943 056 € 1 924 841
2E € 1 735 871 € 2 478 979 € 2 391 544 € 2 383 6311
1) Debatable due to floater/tower integration of SWAY concept

It becomes apparent that employment of a highly expensive offshore crane vessel, where
operational windows are smaller, severely adds to the total installation costs. However, lifting
a nacelle and rotor onto a preassembled floater and tower configuration seems to be the
preferred solution regardless of whether turbine installation operations are to be done near
shore or offshore. The TLB concepts seem to be significantly more reasonable than the other
concepts for at-site installation of components due to their low weight leading to relatively
high transit speeds.

XXV
From the estimated installation costs presented in Appendix Table 16 and Appendix Table 17,
it seems apparent that the favourable installation strategy for all discussed concepts is strategy
1D, where the tower is attached to the floating substructure as a part of the production
process, before the turbine nacelle and preassembled rotor are attached to the tower near shore
using a crane barge, in order to not have to rely on a severely expensive crane vessel able to
perform offshore lifts. The total lift time for this installation method is expected to be
significantly shorter than other methods, and even though the operational window only places
third of the five evaluated lift strategies, the deduction in lift time counteracts the fact that
other lift strategies have more profitable operational window estimates. By assumptions that
floaters and towers may be produced as integrated components, and that up-ending is
expected to be virtually equal for floaters and floater and tower configurations, reductions of
one turbine lift both quayside and near shore makes strategy 1D preferable to strategy 1C.

One example of installation cost calculations are shown in Appendix Table 18, where
installation costs of WindFloat wind turbines through four offshore lifting operations onto an
integrated floater and tower configuration are shown.

Appendix Table 18: Installation cost calculation example: WindFloat, four turbine lifts

Vessel type Operation Value Duration Unit cost OW Total cost

Lifting operations
Quayside crane Quayside lifts 5.00 0.08 € 6 000 75 % € 3 333
Rigging 0.17 65 % € 136 154
Ballast 1.00 1.00 € 531 000 60 % € 885 000
Crane vessel
4 offshore lifts 0.67 46 % € 773 592
Personnel usage 30.0 0.67 € 370 46 % € 16 171
Loading, Assistance and Transportation
Tug boats Transportation 1.00 1.05 71 % € 50 560
Up-ending 0.00 60 % €0
€ 17 000
Mooring 2.00 1.00 55 % € 61 818
Assistance 0.67 46 % € 49 533
AHTS Transportation 0.50 1.05 71 % € 135 323
Up-ending 0.00 60 % €0
€ 91 000
Mooring 1.00 1.00 55 % € 165 455
Assistance 0.67 46 % € 132 574
PSV Loading 1.00 0.33 75 % € 20 444
Transportation 0.33 0.50 € 46 000 70 % € 32 855
Assistance 1.00 0.67 46 % € 67 015
Total installation cost per wind turbine € 2 529 827

XXVI
Appendix 10
Operation and Maintenance Costs
Here, key findings on the O&M costs found through using the OMCE-Calculator are
presented, based on simulations of benchmark floating wind farms. Additionally, simulations
and assumptions associated with increasing offshore distances and farm sizes are presented.
Values from all relevant data are presented in Digital Appendix 1.

Appendix Figure 12: Simulated average failure rate per component

Appendix Figure 12 illuminates the simulated average failure rate of different component
systems of the wind farms. The Wind Turbine category is understood as failures occurring to
the wind turbine not directly applicable to the other component systems. As indicated, generic
wind turbine failures seem to be the most common failures, with foundation failures coming
in second. Broken down on a more specified level, the dominant wind turbine failures are
ones coming from blade adjustment problems and control and protection systems for
generators and turbines.

XXVII
Appendix Figure 13: Average downtime breakdown

Appendix Figure 13 shows the average downtime contribution for components. The figure
suggests that failures on export cables and substations are the main contributors to farm
downtime, expected to be because such failures are assumed to lead to complete farm
downtime. Of the turbine components, it seems failures at control and protection system
generator, yaw gearbox and blade adjustment systems are the main contributors to downtime,
consistent with failure rates presented in Appendix Figure 12.

XXVIII
Appendix Figure 14: Spare material costs over simulation period

Appendix Figure 14 shows the total spare part costs assigned to different farm components,
distributed over average spare part cost, weight and lead time. The figure suggests a continued
trend from Appendix Figure 12 and Appendix Figure 13, where components experiencing the
most failures leading to the biggest downtimes are expected to require the largest number of
spare parts. Even though export and substation cable failures are expected to contribute most
to farm downtimes, repair actions are expected to be relatively infrequent based on spare part
costs.

XXIX
Appendix Figure 15: Spare part cost breakdown - condition-based maintenance

Appendix Figure 15 shows that for condition-based maintenance, almost all spare part costs
come from yaw gearbox maintenance operations.

XXX
Appendix Figure 16: Average availability

Appendix Figure 16 shows the average availability of the wind farm on a season basis. As
indicated, availabilities are simulated to be fairly consistent, but the figure indicates season of
low availability due to high simulated maintenance efforts.

Cost Driver Changes

With increasing farm sizes, most aspects related to O&M costs are assumed proportional to
farm size increments. These aspects include costs related to permanently employed
technicians and all spare part and equipment costs associated with O&M, except mother
vessels.

With increasing farm sizes, it is expected that mother vessels may become slightly larger and
more expensive, before farms at one point become so large that more than one vessel is best
deployed to maintain a high percentage use of employed technicians. Desired number of
vessels and their respective sizes could then be subjected for extensive simulations to find an
optimal balance between mother vessel costs and costs associated with better access to the
wind turbines. Accordingly, a step-by-step increase of total mother vessel costs reminiscent of
the developments for substation costs shown in Appendix Figure 11 could be assumed.
However, for this thesis, a simplified approach is assumed, with increases of 50 % of the
benchmark farm mother vessel costs for each 100 additional wind turbines.

A similar approach is used in estimating costs related to onshore personnel, while port costs
through simplifications are assumed to be constant. When all costs are summarised and
distributed over total wind farm size, the per MW O&M costs are illustrated in Appendix
Figure 17. Note that these costs do not include operation phase insurance costs, assumed to be
proportional to farm size.

XXXI
Appendix Figure 17: Per MW O&M costs with increasing farm size

With offshore distances increasing, costs are merely affected by increased travel times for
vessels, simulated by changing input parameters for the OMCE-Calculator. Cost
developments are presented in Appendix Figure 18.

Appendix Figure 18: Per MW O&M costs with increasing offshore distances

XXXII
O&M Costs Associated with Towing of Wind Turbines to Shore
O&M costs related to towing the wind turbines to shore are conservatively estimated by
finding time spent for detaching and towing the floating wind turbine concept with the most
demanding combined attaching and towing time consumption, being the TLB concepts given
our thesis assumptions presented in section 3.3.3, as this concept utilises the highest number
of mooring lines.

The entire operation may be regarded as follows:

One AHTS and two tug boats are used to reverse the hook-up operation of the wind turbine.
The turbine is then either transferred to an existing shore side infrastructure or to calmer water
where it is possible to do maintenance operation with a crane barge. This provides the
opportunity for significant cost and risk reduction relative to unscheduled maintenance at
times with high demand and cost of crane vessels.

To calculate the costs for towing the wind turbine back to shore for bigger unplanned turbine
maintenance, some simplification and assumptions are made:

- One AHTS and two tug boats will assist throughout the entire maintenance
operation.
- The hook-up and reverse hook-up is assumed to be the same and based on the
average connection time including operational window for the floating
concepts in the installation phase.
- The transit time back and forth is based on the transit time including
operational window that the AHTS uses for towing the complete wind turbine
in the installation phase.
- One crane barge will be used for the repair or replacement operation. It is
assumed that this will take 24 hours including rigging, with an operational
window of 70 %.

With assumptions presented in section 3.3.3, costs related to each operation are presented in
Digital Appendix 1 and Appendix Table 19.

Appendix Table 19: Per trip costs associated with towing wind turbines to shore for maintenance

Operation OW Value
Detachment and attachment of
55 % 3 days
mooring lines
Towing to and from shore (days) 45 % 2 days
Crane barge operation (days) 70 % 1 day
AHTS costs - €2013 1 031 000
Tug boat costs - €2013 385 000
Crane barge costs - €2013 79 000
Mobilisation costs - €2013 493 000
Total cost of each operation - € 2013
1 987 000

These costs are used as inputs for the OMCE-Calculator, leading to O&M costs presented in
Appendix Table 20.

XXXIII
Appendix Table 20: Annual O&M costs, towing wind turbines to shore

Number of maintenance events per year Low Base High

Unplanned corrective 805 855 890
Condition based 4 4 4
Calendar based 120 120 120

Downtime per year Low Base High

Unplanned corrective (h) 36 870 68 540 109 231
Condition based (h) 55 55 55
Calendar based (h) 3 360 3 360 3 360
Total (h) 40 285 71 955 112 646
Availability (time) 95.4% 91.8% 87.2%
Loss of production per year 104 757 189 189 313 703

Cost of repair per year Low Base High

Material costs
Unplanned corrective € 4 821 900 € 5 260 495 € 5 592 250
Condition based € 131 250 € 131 250 € 131 250
Calendar based € 1 600 000 € 1 600 000 € 1 600 000
Labour costs
Unplanned corrective € 4 766 000 € 4 766 000 € 4 766 000
Condition based € 32 190 € 32 126 € 32 074
Calendar based €0 €0 €0
Equipment costs
Unplanned corrective € 40 952 822 € 44 222 300 € 47 785 742
Condition based € 1 533 323 € 1 533 340 € 1 533 403
Calendar based € 7 000 € 7 259 € 7 815
Total costs of repair per year € 53 844 484 € 57 552 770 € 61 448 534

Further, results from simulations with crane vessel day rates at € 2013 531 000 and from
simulations without employments of mother vessels are presented in Appendix Table 21 and
Appendix Table 22. Please note that for Appendix Table 22, three specialised vessels are
simulated utilised instead of two, to increase accessibility.

XXXIV
Appendix Table 21: Annual O&M costs, expensive crane vessels

Number of maintenance events per year Low Base High

Unplanned corrective 826 872 912
Condition based 4 4 4
Calendar based 120 120 120

Downtime per year Low Base High

Unplanned corrective (h) 28 010 51 798 88 197
Condition based (h) 55 55 55
Calendar based (h) 3 360 3 360 3 360
Total (h) 31 425 55 213 91 612
Availability (time) 96.4% 93.7% 89.6%
Loss of production per year 84 121 146 760 240 632

Cost of repair per year Low Base High

Material costs
Unplanned corrective € 4 957 175 € 5 353 363 € 5 739 225
Condition based € 131 250 € 131 250 € 131 250
Calendar based € 1 600 000 € 1 600 000 € 1 600 000
Labour costs
Unplanned corrective € 4 766 000 € 4 766 000 € 4 766 000
Condition based € 32 200 € 32 171 € 32 127
Calendar based €0 €0 €0
Equipment costs
Unplanned corrective € 53 680 692 € 58 712 071 € 64 252 912
Condition based € 1 556 160 € 1 556 184 € 1 556 240
Calendar based €0 €0 €0
Total costs of repair per year € 66 723 477 € 72 151 039 € 78 077 754

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Appendix Table 22:Annual O&M costs, no mother vessel (technician transport to and from shore)

Number of maintenance events per year Low Base High

Unplanned corrective 824 848 870
Condition based 4 4 4
Calendar based 115 116 117

Downtime per year Low Base High

Unplanned corrective (h) 57 290 74 714 97 517
Condition based (h) 149 149 149
Calendar based (h) 3 183 3 206 3 243
Total (h) 60 623 78 069 100 909
Availability (time) 93.1% 91.1% 88.5%
Loss of production per year 165 360 211 615 273 086

Cost of repair per year Low Base High

Material costs
Unplanned corrective € 4 861 375 € 5 254 488 € 5 827 225
Condition based € 131 250 € 131 250 € 131 250
Calendar based € 1 496 500 € 1 510 620 € 1 530 500
Labour costs
Unplanned corrective € 4 766 000 € 4 766 000 € 4 766 000
Condition based € 32 560 € 32 560 € 32 560
Calendar based €0 €0 €0
Equipment costs
Unplanned corrective € 39 286 175 € 42 438 554 € 45 145 913
Condition based € 1 431 758 € 1 432 127 € 1 432 350
Calendar based €0 €0 €0
Total costs of repair per year € 52 005 618 € 55 565 598 € 58 865 798

Note that costs associated with port activities are not changed when disregarding mother
vessels. With increasing port activities, these costs may be expected to increase. However, as
the evaluated strategy is not implemented in the thesis, port costs are not discussed further,
leaving Appendix Table 22 a somewhat liberal O&M cost estimate.

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Appendix 11
Operation Phase Insurance Properties
Appendix Table 23: Operations phase insurance (PricewaterhouseCoopers 2012)

Product Triggering events Scope Status for offshore wind

Operating All Sudden and “All risks” package. Increasingly, insurers require
Risks/ Physical unforeseen physical projects to demonstrate what loss
Damage loss or physical control measures are in place to
damage to the plant minimise losses from high wind,
/ assets during the freak wave conditions, fire and
operational phase lightning and vessel collision
of a project.
Machinery Sudden and Various levels of cover Cover for design risk is difficult
Breakdown accidental for defects in material, to achieve as the technology tends
mechanical and design construction, to evolve rapidly, denying
electrical erection or assembly are insurers sufficient data that
breakdown available subject to the demonstrates a low design risk
necessitating repair experience of the
or replacement. equipment, new WTG’s
with no commercial
operating experience are
unlikely to get full
cover.
Business Sudden and Loss of revenue as a Loss of a single turbine would
Interruption unforeseen physical result of an interruption lead to an insignificant business
loss or physical in business caused by interruption claim, while any loss
damage to the perils insured under the to the export cable or transformer
plant/assets during Operating All Risks could lead to a significant
the operational policy. interruption to overall output. The
phase of a project premium rates for offshore
causing an business interruption therefore
interruption. vary significantly depending on
the design of the project. Repair
times on cables are extensive and
offshore transformers have lead
times of at least 18 months to
replace.
General/Third- Liability imposed This is coverage for the Likely to be inherent in the
Party Liability by law, and/or Works and the Project majority of insurance packages.
Express Liabilities. Coverage for
Contractual hull and charterers
Liability, for liability is an additional
Bodily Injury or purchase and is widely
Property Damage. available in the Marine
market.

XXXVII
Appendix 12
Cost Reduction Potentials
As with onshore wind, significant cost reductions for offshore wind are expected as
performance improves and the industry matures. Such reductions could be achieved through a
combination of technological and supply chain developments, scaling, learning, and
standardisation effects. (Scottish Enterprise 2011) indicate that many of these cost reduction
potential could be realised through benefiting from experiences from the existing oil and gas
industry, and it is estimated that oil and gas expertise could reduce the CAPEX and OPEX
costs for offshore wind energy with approximately 13.5 % and 15 %, respectively. These
estimations match cost reduction potentials estimated by Carbon trust, as shown in Appendix
Table 24.

Appendix Table 24: Cost reduction opportunities and implied learning rates (Delay & Jennings 2008).

Cost component Technology developments Economies of scale Low Mid High

● Incremental improvements ● Upscaling and improved
e.g. blade design, alternative design – Larger and fewer
Turbine materials, more efficient turbines per offshore wind 10 % 15 % 15 %
generators farm
● Longer design life ● Standardisation
● Decreased mass per MW ● High volume manufacture
● New materials techniques
Substructure e.g. pre-stressed concrete ● Standardising 5% 10 % 15 %
● Longer design life
● Not over-engineered
● Lower transmission losses ● Offshore grid connection
Grid ● Improved generation over shared across wind farms
5% 10 % 10 %
Connection variable wind speeds ● One HVDC converter per
wind farm
● Faster, high volume ● Equipment standardisation
installation techniques ● Learning by doing
Installation ● Wind turbines and ● Optimisation of ship use 10 % 15 % 20 %
foundations designed-for-
installation
● Remote and sonar condition ● Manned offshore O&M
monitoring facilities
O&M 10 % 15 % 15 %
● All-weather access ● Spare parts based on-site
technologies

For this thesis, mid-level cost reduction potentials for all categories in Appendix Table 24 are
employed for LCOE sensitivity estimations.

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