Cost performance and risk in the construction of offshore and onshore wind farms

This article investigates the risk of cost overruns and underruns occurring in the construction of 51 onshore and offshore wind farms commissioned between 2000 and 2015 in 13 countries. In total, these projects required about $39 billion in investment and reached about 11 GW of installed capacity. We use this original dataset to test six hypotheses about construction cost overruns related to (i) technological learning, (ii) fiscal control, (iii) economies of scale, (iv) configuration, (v) regulation and markets and (vi) manufacturing experience. We find that across the entire dataset, the mean cost escalation per project is 6.5$63 million per windfarm, although 20 projects within the sample (39%) did not exhibit cost overruns. The majority of onshore wind farms exhibit cost underruns while for offshore wind farms the results have a larger spread. Interestingly, no significant relationship exists between the size (in total MWor per individual turbine capacity) of a windfarm and the severity of a cost overrun. Nonetheless, there is an indication that the risk increases for larger wind farms at greater distances offshore using new types of turbines and foundations. Overall, the mean cost escalation for onshore projects is 1.7% and 9.6% for offshore projects, amounts much lower than those for other energy infrastructure

A Systemic Assessment of the European Offshore Wind Innovation. Insights from the Netherlands, Denmark, Germany and the United Kingdom”

The development and diffusion of offshore wind energy technology is important for European energy policy. However, the large potential does not automatically lead to a large share in future energy systems; neither does an emergent stage of technological development automatically lead to success for companies and the related economic growth and growth in employment. Recent insights in innovation studies suggest that the success chances of technological innovations are, to a large extent, determined by how the surrounding system (the innovation system) is built up and how it functions. Many innovation systems are characterized by flaws that hamper the development and diffusion of innovations. These flaws are often labelled as system problems or system challenges. Intelligent innovation policy therefore evaluates how innovation systems are functioning, tries to create insight into the systems’ challenges and develops policies accordingly. This report assesses the European offshore wind innovation system based on insights from four countries: Denmark, the UK, the Netherlands and Germany. We use the Technological Innovation System (TIS) approach to analyse the state and functioning of the system at the end of 2011. Based on the analysis we identify four types of systemic challenges: (i) actor-related such as deficiency of engineers; (ii) institutional, e.g. non-aligned national regulatory frameworks; (iii) interaction-related like poor transferability of scientific knowledge to specific contexts of application and; (iv) infrastructural such as poor grid infrastructure. We suggest the challenges require a systemic, coordinated policy effort at a European level if the system is expected to contribute to the goals of climate change reduction and stimulation of green growt