Development is a challenging task and without a doubt, the most important one is to plan each production, cost, and risk factor to its maximum before making the final investment decision on building an offshore wind farm.
But how is it to get started in development?
You start by evaluating at least these points, to begin with:
- Wind resource
- Water depth
- Electric grid connection
- Access and construction
- Land/seabed ownership
- Planning permissions
- Subsidies
- Power purchase agreement
- Electricity market price
This is a long process and it all starts with the idea phase before entering the remaining stages of offshore wind farm development:
The figure above it displays how the different stages in offshore wind farm development work in a typical development project. At least three to five years are needed to design the wind farm and procure the turbines, foundations, and electrical systems before the start of construction. Then the operational phase takes over and spans at least 25 years before the wind farm is decommissioned. The three major milestones are FID (Final investment decision) just before construction of the wind farm, Commercial Operation Date (COD) the date of final commissioning of the wind farm and operations start officially and termination where the turbines, foundations, and other equipment is dismantled and the seabed is left as it was before.
A cash-flow analysis is a good method to evaluate the economic result of the wind farm project year by year. It provides information about production, losses, power price, subsidies, loans, interest rates, inflation, and other factors that have a project economic impact. YOUWINd model calculates the outcome year by year and the cash flow i.e. annual revenues, development cost (DEVEX), capital costs (CAPEX) maintenance cost (OPEX), decommissioning cost (ABEX), and remaining surplus. The results are LCOE before and after tax, NPV, DSCR, Project IRR, and Equity IRR to name a few that help in the decision-making process.
The phases are different but the pre-study and development phase focus on finding the optimal wind farm site, evaluating the price, analyzing the competitors, and ensuring the overall wind farm solution is feasible in terms of risk and costs.
But what are the different phases of offshore wind farm development?
- Idea phase
- Pre-studies
- Development
In the idea phase, we look for suitable sites in terms of site resources, area, and current restrictions on site. Here it is important to collect all available maps and site data available together with what are potential wind turbines, foundations, and logistics that can be used for the site.
Should the sites be showing the potential for profit we look closer into the possible land available, the environmental impact, production, and overall project economy. If the project is profitable then the application for permission and planning for overall procurement starts with the goal of having the opportunity to build the wind farm within a few years.
To learn more about how the idea phase and pre-studies of offshore wind farms are made, then feel free to stay in touch with our YOUWIND engineers at info@youwindrenewables.com.
Jesus Ramos
