Like all countries surrounding the North Sea, Norway is gearing up for large-scale offshore wind development. The energy resources white paper, published on June 11th, proposes designating a single offshore system operator, with offshore wind developers paying for the network infrastructure. The costs of developing offshore wind generation capacity are expected to drop. The costs of the offshore grid, however, will depend on how the grid is developed.
In a project for the Ministry of Petroleum and Energy, we assessed the costs of different components and technologies used in the deployment of both offshore wind generation and offshore grids. Generation-related costs comprise the largest share, by far, of total project costs, with wind turbines and foundations being the largest cost elements.
The structure of offshore grid costs depends on the choice between alternate current (HVAC) and direct current (HVDC) technology, the volume of offshore wind capacity connected and the distance to the connection point. For a 1000 MW bottom-fixed wind farm located 200 km from shore with a radial connection to shore, grid costs make up 25 percent of total project costs. The total costs of an HVDC system are about 4 percent lower than those of an HVAC system in this case.
These costs are, however, substantially affected by how the offshore wind capacity is connected to the market.
We have calculated the costs for three cases:
- A direct radial connection to the onshore grid
- As above, but with anticipatory investments to facilitate later connection to a masked grid or another market
- Common connections supporting offshore wind generation and the electrification of offshore oil and gas installations
The calculations illustrate both technology options and the consequences of including anticipatory investments.
The results show that if the offshore wind farm is set up for future hybrid connection, the infrastructure cost increases by around 30 percent in the cases examined. In the case that examines the common connection of offshore wind and offshore oil and gas installations, the potential cost savings are substantial. However, the magnitude naturally depends on several parameters such as the distance between the installations, the demand for power offshore, etc.
The project was commissioned by the Ministry of Petroleum and Energy and carried out in cooperation with Multiconsult. The study formed part of the evidence base for the Ministry’s energy resources white paper (Meld.St. 36 (2020–2021) Energi til arbeid – langsiktig verdiskaping fra norske energiressurser) and proposals for the development of offshore wind in Norway. The latter were published for public consultation alongside the white paper.