Capital Cost Estimation: A Reference Class Approach

Capital expenditures for offshore wind projects are a significant determinant of profitability and project risk. The purpose of this chapter is to review the capital expenditures of existing offshore wind farms to inform estimates of U.S. costs. A reference class of 18 wind farms with monopile foundations baselines U.S. capital costs between $3.8 and 4.8 million/MW. Regression models are developed to investigate the physical factors that influence expenditures. Capital costs increase with increasing water depth, steel prices, and the application of jacket foundations. For most farm components, capital expenditures are expected to be similar in Europe and the U.S., but the installation markets will differ which may impact the reliability of the reference class approach.