Cost of wind turbines

The growth in offshore wind energy is primarily driven by the increasing demand for renewable energy resources around the world. As technology evolves and demand grows, it is important to understand all the phases and costs connected to offshore wind farms.

When setting up an offshore wind farm, multiple factors come into play when it comes to cost. This includes development and project management, installation and commissioning, operation, maintenance and service, and decommissioning. Costs differ from project to project, depending on how deep the water is, what type of foundation is used, how far from shore the farm is located, and so on. The figures provided below are a general estimate.

The first, comprehensive planning phase of an offshore wind project comprises all activities needed for approval and design before actual construction can begin. This includes surveys to map the potential impact on nature and wildlife surrounding the farm, such as the marine environment, marine mammals and bird life. It also includes resource and met ocean assessments, engineering and consultancy.

Although the process is complex, it is vital for the lifespan and cost efficiency of an offshore wind farm. The cost for this phase is around EUR 140 million for a 1 GW wind farm. 

The installation and commissioning phase for an offshore wind farm usually lasts about three years. This includes all supporting infrastructure, turbine installation and transportation, both on land and at sea. The total cost comes to about EUR 765 million for a 1 GW wind farm. Insurance and project management are also included in this cost.

Operation, maintenance and service (OMS) activities are fundamental for long-term cost and energy efficiency as well as for wind farm safety. OMS activities start as soon as the installation process is completed and the wind farm is handed over to the operator.

The operation of an offshore wind farm involves the day-to-day management of the wind turbines, balance of plant (i.e. all infrastructure aside from turbine blades) and transmission assets for transferring electricity from the wind farm to the grid. The maintenance and control of turbine blades are normally covered by the initial warranty period.

Other types of maintenance include preventive maintenance, which comprises routine inspections, corrective maintenance and optimisation. Continuous safety assessment also ensures that all operations are carried out according to safety standards to protect both personnel and equipment.

The total cost of OMS comes to roughly EUR88 million for a 1 GW wind farm.

When an offshore wind farm reaches its end of life, the decommissioning phase begins. This involves removing and securing the offshore infrastructure, and dismantling the turbine, foundation, cables and other equipment, as well as the port established for offloading the equipment.

The decommissioning of a 1GW offshore wind farm will cost around EUR 352 million, excluding any resale value of the equipment removed.

The annual cost of operating a 1 GW offshore wind farm can range anywhere from roughly EUR 94 million to EUR 296 million. This covers operation, maintenance, insurance and other operational costs. Costs will vary based on specific project conditions, technology used and local factors.

Offshore wind farms require a substantial initial investment. Government subsidies and support can help to reduce initial investment risk and increase profitability. Technological innovations over time, such as improved turbine designs and less costly installation methods, will enhance efficiency and reduce costs. 

Despite the heavy initial investment, the outlook for long-term profitability of offshore wind farms is good, thanks to consistent, reliable power production, among other things. Technological advancements are expected to reduce the levelised cost of energy (LCOE), making offshore wind a competitive renewable energy source for the future.