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Title: Estimating the value of offshore wind along the United States’ Eastern Coast

Abstract

Offshore wind power deployment has been concentrated in Europe, and remains limited in other areas of the world. Among the many challenges to deployment is the need to understand the value that offshore wind provides within electricity markets. Here, this article develops a rigorous method to assess the economic value of offshore wind along the eastern coastline of the United States, seeking improved understanding of how the value of offshore wind varies both geographically and over time, and what has driven that variation. The article uses historical (2007–2016) weather data at thousands of potential offshore wind sites, combined with historical wholesale electricity market outcomes and renewable energy certificate (REC) prices at hundreds of possible transmission interconnection points. We find that the average historical market value of offshore wind from 2007 to 2016—considering energy, capacity, and RECs—varies significantly by project location, from $40/MWh to more than $110/MWh, and is highest for sites off of New York, Connecticut, Rhode Island, and Massachusetts. As energy and REC prices have fallen in recent years, so too has the market value of offshore wind. The historical value of offshore wind is found to exceed that of onshore wind, due to offshore wind sites being locatedmore » more favorably in terms of constrained pricing points, and also due to a more-favorable temporal profile of electricity production. Cost reductions that approximate those witnessed recently in Europe may be needed for offshore wind to offer a credible economic value proposition on a widespread basis in the United States.« less

Authors:
ORCiD logo [1]; ORCiD logo [1];  [1];  [1];  [1];  [1]
  1. Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Publication Date:
Research Org.:
Lawrence Berkeley National Lab. (LBNL), Berkeley, CA (United States)
Sponsoring Org.:
USDOE Office of Energy Efficiency and Renewable Energy (EERE), Wind Energy Technologies Office (EE-4WE)
OSTI Identifier:
1468496
Alternate Identifier(s):
OSTI ID: 1479451
Grant/Contract Number:  
AC02-05CH11231
Resource Type:
Published Article
Journal Name:
Environmental Research Letters
Additional Journal Information:
Journal Volume: 13; Journal Issue: 9; Journal ID: ISSN 1748-9326
Publisher:
IOP Publishing
Country of Publication:
United States
Language:
English
Subject:
17 WIND ENERGY

Citation Formats

Mills, Andrew D., Millstein, Dev, Jeong, Seongeun, Lavin, Luke, Wiser, Ryan, and Bolinger, Mark. Estimating the value of offshore wind along the United States’ Eastern Coast. United States: N. p., 2018. Web. doi:10.1088/1748-9326/aada62.
Mills, Andrew D., Millstein, Dev, Jeong, Seongeun, Lavin, Luke, Wiser, Ryan, & Bolinger, Mark. Estimating the value of offshore wind along the United States’ Eastern Coast. United States. doi:10.1088/1748-9326/aada62.
Mills, Andrew D., Millstein, Dev, Jeong, Seongeun, Lavin, Luke, Wiser, Ryan, and Bolinger, Mark. Sat . "Estimating the value of offshore wind along the United States’ Eastern Coast". United States. doi:10.1088/1748-9326/aada62.
@article{osti_1468496,
title = {Estimating the value of offshore wind along the United States’ Eastern Coast},
author = {Mills, Andrew D. and Millstein, Dev and Jeong, Seongeun and Lavin, Luke and Wiser, Ryan and Bolinger, Mark},
abstractNote = {Offshore wind power deployment has been concentrated in Europe, and remains limited in other areas of the world. Among the many challenges to deployment is the need to understand the value that offshore wind provides within electricity markets. Here, this article develops a rigorous method to assess the economic value of offshore wind along the eastern coastline of the United States, seeking improved understanding of how the value of offshore wind varies both geographically and over time, and what has driven that variation. The article uses historical (2007–2016) weather data at thousands of potential offshore wind sites, combined with historical wholesale electricity market outcomes and renewable energy certificate (REC) prices at hundreds of possible transmission interconnection points. We find that the average historical market value of offshore wind from 2007 to 2016—considering energy, capacity, and RECs—varies significantly by project location, from $40/MWh to more than $110/MWh, and is highest for sites off of New York, Connecticut, Rhode Island, and Massachusetts. As energy and REC prices have fallen in recent years, so too has the market value of offshore wind. The historical value of offshore wind is found to exceed that of onshore wind, due to offshore wind sites being located more favorably in terms of constrained pricing points, and also due to a more-favorable temporal profile of electricity production. Cost reductions that approximate those witnessed recently in Europe may be needed for offshore wind to offer a credible economic value proposition on a widespread basis in the United States.},
doi = {10.1088/1748-9326/aada62},
journal = {Environmental Research Letters},
number = 9,
volume = 13,
place = {United States},
year = {2018},
month = {9}
}

Journal Article:
Free Publicly Available Full Text
Publisher's Version of Record
DOI: 10.1088/1748-9326/aada62

Citation Metrics:
Cited by: 1 work
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