Offshore Wind Models
Executive Summary
Key Takeaways
- ✓ Offshore wind carries substantially higher capital cost per unit of capacity than onshore wind, driven by foundation type, marine installation logistics, and offshore-specific equipment, and should be modelled with its own capital cost basis rather than an onshore wind benchmark.
- ✓ Operations and maintenance access to offshore turbines is constrained by weather windows and marine vessel or helicopter logistics, which can extend repair timelines materially relative to onshore access, and this should be reflected in the availability and O&M cost assumptions.
- ✓ Export cable and offshore substation infrastructure, connecting the wind farm to the onshore grid, is a distinct, substantial capital cost and availability risk specific to offshore projects, and should be modelled as its own component rather than folded into general balance-of-plant cost.
- ✓ Offshore wind typically achieves a materially higher capacity factor than onshore wind due to stronger and more consistent offshore wind resource, which should be reflected in the technical output build using a site-specific offshore resource assessment.
- ✓ Decommissioning cost for offshore infrastructure is typically higher than for an equivalent onshore project, given the marine removal logistics involved, and should be modelled explicitly where relevant to the asset's expected life and any associated decommissioning reserve.
Objective¶
This guide covers the offshore-specific cost and operating mechanics for offshore wind financial models, within Energy Financial Modelling, building on the core technical output mechanics already covered in Wind Farm Financial Models — wind speed distribution, power curve, wake effect losses — which apply to offshore wind as well.
Capital Cost Structure¶
Offshore wind requires specialized foundation types (monopile, jacket, or floating, depending on water depth), marine installation vessels and logistics, and offshore-specific electrical infrastructure, all carrying materially higher capital cost per unit of capacity than an onshore project. The model should build capital cost from an offshore-specific basis — foundation type matched to the site's water depth and seabed conditions, and offshore installation logistics — rather than applying an onshore wind capital cost benchmark, which would materially understate offshore project cost.
Weather-Window-Constrained O&M¶
Access to offshore turbines for maintenance and repair depends on sea conditions permitting safe vessel or helicopter access. During poor-weather periods, this access can be delayed for extended periods relative to onshore turbines, which are generally accessible by road at any time. Availability assumptions should reflect this constraint explicitly, sourced from the specific site's marine weather conditions and the O&M contract's access and logistics plan, rather than applying an onshore availability factor benchmark that does not account for weather-window-constrained access.
Export Cable and Offshore Substation Infrastructure¶
The export cable and offshore substation connecting the wind farm to the onshore grid represent a distinct, substantial capital cost item and a distinct availability risk specific to offshore projects — a fault in the export cable or offshore substation can take the entire farm offline regardless of individual turbine availability. This infrastructure should be modelled as its own component, with its own capital cost, maintenance regime, and availability contribution, rather than folded into a general balance-of-plant cost line that would obscure both its cost significance and its specific single-point-of-failure risk profile.
Capacity Factor¶
Offshore sites typically experience stronger and more consistent wind resource than most onshore sites, and offshore wind farms typically achieve a materially higher capacity factor as a result. This should be reflected in the technical output build using a site-specific offshore resource assessment, following the same wind speed distribution and power curve mechanics described in Wind Farm Financial Models, rather than an onshore capacity factor benchmark.
Decommissioning Cost¶
Removing offshore foundations, turbines, and export cable infrastructure at the end of the asset's operating life typically involves marine logistics that are materially more costly than equivalent onshore decommissioning. Where relevant to the asset's expected life, decommissioning cost and any associated reserve should be modelled explicitly, reflecting the offshore-specific removal logistics rather than an onshore decommissioning cost benchmark.
Common Construction Pitfalls¶
Onshore capital cost benchmark applied. Using an onshore wind capital cost basis for an offshore project materially understates true project cost.
Weather-window access ignored. Modelling offshore O&M access and repair timelines as equivalent to onshore access understates both repair duration and its effect on availability.
Export infrastructure folded into general cost. Combining export cable and offshore substation cost into general balance-of-plant cost obscures both its cost significance and its distinct availability risk.
Recommended Practices¶
- Build capital cost from an offshore-specific basis matched to the site's water depth, seabed conditions, and foundation type.
- Model O&M availability with explicit reference to weather-window access constraints and marine logistics.
- Model export cable and offshore substation infrastructure as its own capital cost and availability component.
- Use a site-specific offshore resource assessment for the technical output build.
- Model offshore-specific decommissioning cost and any associated reserve explicitly.
Continue Reading¶
Related Pillars¶
Related Technical Guides¶
Related Glossary¶
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Frequently Asked Questions
Why is offshore wind capital cost modelled separately from onshore wind?
Because offshore wind requires specialized foundation types (monopile, jacket, or floating, depending on water depth), marine installation vessels and logistics, and offshore-specific transmission infrastructure, all of which carry materially higher capital cost per unit of capacity than an onshore project — an onshore wind capital cost benchmark would understate offshore project cost.
How do weather windows affect offshore O&M modelling?
Offshore turbine access for maintenance and repair depends on sea conditions permitting safe vessel or helicopter access, which can extend repair timelines materially during poor-weather periods relative to onshore access — availability assumptions should reflect this constraint, sourced from the specific site's marine weather conditions and the O&M contract's logistics plan.
Why is export cable infrastructure modelled as its own component?
Because the export cable and offshore substation connecting the wind farm to the onshore grid represent a distinct, substantial capital cost and a distinct availability risk — a cable fault can take the entire farm offline regardless of individual turbine availability — and folding this into general balance-of-plant cost understates both its cost significance and its specific risk profile.
Does offshore wind typically achieve a higher capacity factor than onshore wind?
Yes, typically, due to stronger and more consistent wind resource offshore relative to most onshore sites, and this should be reflected in the technical output build using a site-specific offshore resource assessment rather than an onshore wind capacity factor benchmark.
Why does decommissioning cost matter more for offshore wind?
Because removing offshore foundations, turbines, and export cable infrastructure involves marine logistics that are typically more costly than equivalent onshore decommissioning, and this should be modelled explicitly, including any associated decommissioning reserve, where relevant to the asset's expected life.
References
Related Articles
Energy Financial Modelling
Energy financial modelling is the discipline of building financial models for power generation assets, independent power producers, and renewable energy projects — structured around a technical output schedule and an electricity revenue stack that a standard corporate or general project finance model has no direct equivalent for. This page is the hub for the Knowledge Centre's energy and power modelling content: how a power project model is architected, how electricity markets and dispatch mechanics translate into revenue, and how power purchase agreements, capacity payments, and merchant exposure combine into a project's revenue structure. Technology-specific renewable energy models (solar, wind, storage, hydro, and others), technical and commercial modelling mechanics, and institutional practice for this asset class are indexed here as the domain expands.
Wind Farm Financial Models
A wind farm financial model specializes the base power project model structure with technical output mechanics specific to wind generation: a wind speed distribution converted through the turbine power curve to energy output, wake effect losses from turbine-to-turbine interference within the farm layout, and turbine class selection matched to the site's wind resource. This guide covers each of these wind-specific mechanics and how they should be built into the model.
Power Project Financial Model Structure
A power generation financial model is architected around a technical output schedule — generation volume for a variable-output asset or available capacity for a dispatchable one — that drives every downstream calculation: the electricity revenue stack, the operating cost build, and, where the asset is project-financed, debt sculpting and covenant testing. This guide sets out that architecture as a sequence of explicit, separately built modules, distinct from a standard corporate model's revenue-growth-first structure.
Availability Factor
Availability factor is the percentage of a period during which a generation asset is capable of producing output, whether or not it is actually dispatched or the resource is present. It reflects planned outages (scheduled maintenance) and unplanned outages (equipment failure), and should be modelled distinctly from both capacity factor and curtailment.
Capacity Factor
Capacity factor expresses a generation asset's actual energy output over a period as a percentage of the output it would have produced running at full nameplate capacity continuously over that same period. It is the core utilization metric for comparing generation assets and technologies, distinct from availability, which measures uptime rather than realized output.