Offshore Renewable Energy

Economic Costs

Offshore Renewable Levelized Cost of Energy

(US dollars per kilowatt/hour)

  • 0.7
  • 0.6
  • 0.5
  • 0.4
  • 0.3
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  • 0.1
  • 0.0

Renewable energy must compete economically with today's standard energy resources. One reason ocean energy is slow to develop in the United States is the associated comparative costs (Navigant 2014).

The charts on this page compare three economic variables that impact feasibility: the levelized cost of energy (LCOE), which is the cost to build and operate an energy generation device over its lifetime divided by the total power generated over its lifetime, the capital cost of energy, which is the start-up cost for a project, and the net capacity factor, which is the ratio of actual energy output in comparison to full potential of energy generated. The ideal energy resource has a low LCOE and capital cost and a high capacity factor.

New technologies characteristically have high costs and high variability of costs. As an industry advances, infrastructure and knowledge increase, and risk of investment becomes more advanced, driving the cost and cost variability down. Offshore renewable energy is characterized as a new energy type, and as such, the costs listed here are expected to decrease (Daniel et al. 2014).

Environmental Costs:

The understanding of potential environmental impacts of offshore renewable energy is limited and highly dependant on the size, site, and technology type of the energy proposed. Assessing and planning based on environmental impact is another key consideration in offshore renewable energy development.

Search the TETHYS database for a repository of studies on environmental effects from offshore renewable energy. See below for a quick glimpse at potential environmental impacts.

Resource Element Potential hazard To lower risk...
Wind, Tidal, Current, Laying Cables Disturbance, injury, and death of benthic habitat and creatures Plan cable paths that minimize damage to significant benthic habitats
Wind, Tidal, Current, Underwater device installation Disturbance, displacement, and death of benthic habitat and creatures Avoid development on top of significant benthic habitats. Bonus: May act as an artificial reef, attracting the growth of plants and animals
Wind, Tidal, Current, Construction and maintenance Noise pollution which affects animals' ability to hunt and mate Minimize time taken and level of noise involved in maintenance
Tidal, Current, Oscillating energy devices Disturbance, injury, or entrapment of marine mammals, large fish, and diving birds Avoid development in ecological hotspots; develop technology to slow or shut down turbines when large animal is nearby
Tidal, Current Underwater tidal turbines Disturbance, collision, and death of marine mammals, large fish, and diving birds Avoid development in ecological hotspots; develop technology to slow or shut down turbines when large animal is nearby
Wind Turbine blades Disturbance, collision, and death of birds Avoid development along important bird migratory routes
Tidal Tidal stream turbine arrays Alterations in sediment and seabed morphology Run tests before deployment— most sites are likely to have minimal change
Tidal Tidal range barrage construction Large-scale estuarine habitat alteration and species displacement Add tidal range technology to outlets that contain preexisting infrastructure
Current Ocean current energy devices Disturbance and impediment of migratory routes of species Avoid development in sections of significant migration; Opt for a location or depth that minimizes species traffic
Wave Energy Converters Alteration of physical processes of waves near shore— sediment transport, beach building, etc. Run site-specific simulations to examine impacts prior to installing wave energy converters

updated 20-May-2015