From time to time, I take a look at other people’s estimates of the levelised costs of renewable power, particularly offshore wind. The merchant bank Lazard has been a source of particular amusement, their figures being so far divorced from reality as to be entirely laughable.
Another oft-cited source on the subject of levelised costs is the International Energy Agency (IEA), whose latest opus on the subject was published a couple of years back. For comedy value, this is right up there with Lazard. Here is their data table on offshore wind.
Followers of the renewables scene will immediately notice that the capacity factors given are extremely optimistic. They are just about plausible as first-year figures, but certainly not as lifetime averages, which would be expected to be in the mid-30s. Extraordinarily, the IEA claims that “the only technology where efficiency losses have a systematic effect is solar PV”. Here is the UK offshore wind output data by turbine size and year of operation.
Meanwhile, the IEA’s levelised cost figures are staggeringly low. At a 3% cost of capital, the numbers cited for the US fall to around £20/MWh, which is roughly one sixth of what offshore windfarms cost in the UK.
But there’s a second problem here. While 14 (unnamed) windfarms are outlined for the US, unfortunately, out in the real world, Uncle Sam has only got round to building two, both tiny pilot plants. Block Island, the larger of the two, has been so staggeringly expensive it makes even the UK ones look cheap.
So where is the IEA getting these numbers for US offshore windfarms from? I have no idea.
It’s the same for some of the other countries too. France opened its first commercial offshore windfarm only last year, while Australia has yet to open even one! The temptation is to assume that the IEA’s numbers are entirely fictional.
Finally, it’s worth noting that at the time of the report’s publication, half of the world’s offshore wind capacity was in the UK, where hard data on the (very high) costs and the (rapidly deteriorating) operating performance is freely available. Strangely though, the IEA has chosen to include not a single windfarm from these shores.