The Danish Energy Agency has launched an updated levelized cost of energy (LCoE) calculator which shows that costs to build and operate an offshore wind farm in Denmark have declined by more than 30 per cent compared to previous projections.
A combination of lower initial investment (CAPEX) and declining operational costs (OPEX), as well as technological improvements that allow new offshore wind projects to harvest more energy out of the wind at lower costs, are the main reasons for the decline in LCoE.
The levelized cost of energy for a Danish offshore wind project is expected to have fallen to EUR 46 per MWh excluding grid and system costs with a production start in 2020, the new calculations show.
Compared to previous assumptions, CAPEX is expected to have gone down by close to 40%. Also, improvement in operation and maintenance is expected to reduce OPEX by more than 20%. At the same time, improvement in wind and powertrain design is expected to increase the amount of full-load hours of Danish offshore wind projects by 10%, giving a capacity factor of more than 50%.
The LCoE Calculator is a tool to estimate and compare the socio-economic electricity production costs in a simplified manner using localized data and estimates. The tool is designed for policymakers, energy regulators and planners.