Volume 9, Issue 3 e371
Focus Article

Overplanting in offshore wind power plants in different regulatory regimes

Christoph Wolter

Christoph Wolter

DTU Management, Technical University of Denmark, Kongens Lyngby, Denmark

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Henrik Klinge Jacobsen

Corresponding Author

Henrik Klinge Jacobsen

DTU Management, Technical University of Denmark, Kongens Lyngby, Denmark

Correspondence

Henrik Klinge Jacobsen, DTU Management, Technical University of Denmark, Kongens Lyngby, Denmark.

Email: [email protected]

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Lorenzo Zeni

Lorenzo Zeni

Electrical System Analysis, Ørsted Wind Energy, Gentofte, Denmark

Contribution: Methodology, Supervision, Writing - review & editing

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Georgios Rogdakis

Georgios Rogdakis

Electrical System Analysis, Ørsted Wind Energy, Gentofte, Denmark

Contribution: Methodology, Supervision, Writing - review & editing

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Nicolaos A. Cutululis

Nicolaos A. Cutululis

DTU Wind Energy, Technical University of Denmark, Risø, Denmark

Contribution: Methodology, Supervision, Writing - review & editing

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First published: 04 March 2020
Citations: 7

Abstract

The development of offshore wind farms depends on many technical and economic parameters, which requires an integrated planning approach. Some parameters can be controlled by the wind farm developer, and some are determined by the regulatory authorities. Others can be outside control of both. One aspect of optimizing wind farm development is overplanting, which represents the capacity optimization between installed generation capacity and transmission capacity, which allows for a minor share of energy curtailment to increase the overall value of the farm. Quantifying this value also depends on the regulatory framework, which is analyzed here by comparing United Kingdom and Danish conditions. Using a discounted cash flow model, we find that UK conditions are favorable to overplanting from the developer perspective, where the benefit of using the transmission cable more efficiently supports overplanting. In the Danish case, the private-economic incentive to overplant is minor due to the constraint of linking subsidies to a certain energy output. On the other hand, when the cost of turbines declines relative to transmission system costs, overplanting tends to become more attractive. This is mostly the case when installing wind farms further offshore compared to projects closer to the coast, which has been exerted more and more exerted in the recent years. In a socioeconomic perspective, overplanting is also a viable method to optimize the wind farm technically and economically, if the cost of the additional turbines is less than the value of the additional generation that can be fed into the grid by the transmission line.

This article is categorized under:

  • Wind Power > Economics and Policy

  • Wind Power > Systems and Infrastructure

Graphical Abstract

Overplanting in offshore wind farms is profitable but magnitude depends on the regulatory setup. Overplanting of offshore wind farms with additional turbines relative to export cable capacity is in general attractive but the optimal number of turbines depends on the specific setting. There are two possible contributions to additional profit from overplanting; the first and main one is the increased use of the fixed connection capacity; the second is due to receiving the support payments earlier in case of a maximum lifetime production volume entitled to support. Both contributions depend on the regulatory regime and this is analyzed and compared to other studies including UK and Danish conditions. Using a discounted cash flow model, regulatory regimes and geographic characteristics of offshore wind development areas are compared by their impact on the profitability of overplanting. It is found that UK conditions are favorable to the option of overplanting from the developer perspective, where the benefit of using the connection line more efficiently supports overplanting. In the Danish case, the private incentive to add turbines has been limited due to the constraint of limiting subsidies to a given total energy output. When the cost of turbines decline relative to connection costs the overplanting tend to become more attractive and if the length of connections increases with for example far offshore projects in the North Sea the benefit of overplanting also rises. Socioeconomically overplanting may also be an efficient strategy as scarce investment funds for cable capacity per transported kwh is saved.

CONFLICT OF INTEREST

The authors have declared no conflicts of interest for this article.