Development is a challenging task and without 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 with evaluating at least these points to begin with:
- Wind resource
- Water depth
- Electric grid connection
- Access and construction
- Land/seabed ownership
- Planning permissions
- 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:
In the figure above it is displayed how the different stages in offshore wind farm development work in a typical development project. At least three or four years are needed to design the wind farm and procure the turbines, foundations and electrical systems before 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) is 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 have the focus on finding the optimal wind farm site, evaluate the price, analyse the competitors and ensure 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
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 wind turbines, foundations and logistics that can be used for the site.
Should the sites be showing potential of profit it we look closer into the possible land available, the environmental impact, production and overall project economy. If the project is profitable then application for permission and planning for overall procurement starts with he goal of having the opportunity to build the wind farm within a few years.