An athlete swims past the Sheringham Shoal Offshore Wind Farm off the coast of Norfolk, England.
Technical Summary

Offshore Wind Turbines

Project Drawdown defines offshore wind turbines as: offshore utility-scale wind power technologies. This solution replaces conventional electricity-generating technologies such as coal, oil, and natural gas power plants.

Offshore wind solutions are increasingly being adopted where wind is less intermittent and the turbines can harvest more energy. The offshore placement increases construction and grid connection costs due to the more remote location, and requires increased investment to protect equipment from the ocean environment, but the capacity factors of offshore turbines are often higher than onshore turbines. Modifications include: upgrades to the support structure so it can withstand added loading from waves; pressurized nacelles; and environmental controls to prevent corrosive sea air from degrading electrical components.

Since the amount of power generated by a wind turbine is primarily determined by its size and the intensity of the wind resources, offshore locations are a growing opportunity. By the end of 2018, the global cumulative installed offshore wind capacity  was approximately 23.7 GW with Europe and China holding 78% and 22% shares, respectively.

Methodology

Total Addressable Market[1]

Two total addressable markets were developed for this sector solutions, supported on lower and higher climate emissions mitigation targets linked to different levels of electricity demand and renewable energy sources integration. The total addressable market for offshore wind turbines is based on projected global electricity generation in terawatt-hours from 2020-2050, with current adoption[2] estimated at 0.27 percent (i.e. 62 terawatt-hours) of generation.

Adoption Scenarios[3]

Impacts of increased adoption of offshore wind turbines from 2020-2050 were generated based on two growth scenarios, which were assessed in comparison to a Reference Scenario where the solution’s market share was fixed at the current levels.

  • Scenario 1: this scenario is based on the evaluation of four ambitious scenarios from IEA (2017) Energy Technology Perspectives 2DS and B2DS scenarios; IEA (2018) World Energy Outlook SDS; and Equinor (2018) Renewal Scenario; using a medium growth trajectory, while capturing 4.2 percent of the electricity generation market share in 2050 with 1,918 TWh generated.
  • Scenario 2: This scenario follows a more aggressive adoption pathway (high growth trajectory) but supported in the same abovementioned scenarios, resulting in a 3.2 percent share of the market in 2050 ,  under a higher total addressable market, with 2,255 TWh of electricity generated.

Financial Model

The financial inputs used in the model consider an average installation cost of US$3,485 per kilowatt,[4] with a learning rate of 8.2 percent. An average capacity factor of 39.6 percent is used for offshore wind turbines, compared to 57 percent for conventional technologies such as coal, natural gas, and oil power plants. Variable operation and maintenance costs of US$0.00.017 per kilowatt-hour and of US$99.98 per kilowatt for fixed costs are considered for offshore wind, compared to US$0.005 per kilowatt-hour and US$34.7 per kilowatt for the conventional technologies.

Integration[5]

Through the process of integrating wind turbines (offshore) with other solutions, the total addressable market for electricity generation technologies was adjusted to account for reduced demand resulting from the growth of more energy-efficient technologies,[6] as well as increased electrification from other solutions like electric vehicles and high-speed rail. Grid emissions factors were calculated based on the annual mix of different electricity generating technologies over time. Emissions factors for each technology were determined through a meta-analysis of multiple sources, accounting for direct and indirect emissions.

Results

The results for the Scenario 1 show that the net cost compared to the Reference Scenario would be US$632.2 billion from 2020-50, and around US$673.2 billion in savings over the lifetime of the installed technologies on the same period. Increasing the use of offshore wind from about 0.24 percent in 2018 to 4.2 percent of world electricity generation by 2050 would require an estimated US$1.4 trillion in cumulative first costs. Under the Scenario 1, offshore wind turbines could reduce 10.4 gigatons of carbon dioxide-equivalent greenhouse gas emissions from 2020-2050.

The Scenario 2 is more ambitious in the growth of offshore wind technologies, with impacts on greenhouse gas emission reductions over 2020-2050 of 11.4 gigatons carbon dioxide-equivalent.

Discussion

Wind power plays a large and essential role in any long-term projections toward a low-carbon future: wind has large megawatt capability, is globally available, and the output of wind and solar is complementary in many regions of the world. As a renewable resource, wind does not require mining or drilling for fuel, and its costs are therefore not susceptible to fluctuations in fossil fuel prices.

The growth of offshore wind could be aided by renewable energy and portfolio standards that mandate a certain level of renewable use. Wind developers could also benefit from regulatory stability, such as feed-in-tariffs that guarantee a certain rate of return on wind energy, and tax incentives that encourage investment in low-carbon projects like wind by helping offset development costs. Public research and development, particularly for this immature technology, can also help decrease costs. Technology knowledge transfer could help spread wind power across borders.

 

[1] For more about the Total Addressable Market for the Electricity Generation Sector, click the Sector Summary: Electricity Generation Sector link below.

[2] Current adoption is defined as the amount of functional demand (i.e. TWh) supplied by the solution in 2018.

[3] To learn more about Project Drawdown’s two adoption scenarios, click the Scenarios link below. For information on Electricity Generation Sector-specific scenarios, click the Sector Summary: Electricity Generation link.

[4] All monetary values are presented in US2014$.

[5] For more on Project Drawdown’s Electricity Generation Sector integration model, click the Sector Summary: Electricity Generation link below.

[6] For example: LED lighting and high efficiency heat pumps.