Posters

Abstract

Wind energy is a low-carbon electricity source with global wind resources greatly exceeding electricity demand. Anthropogenic global warming is expected to alter the atmospheric circulation at regional scales, impacting local wind resources, and consequently affecting the economic potential of wind park projects in different areas. To the best of our knowledge, the potential impacts of climate change on wind resource are rarely taken into account in wind park development projects. However, wind parks typically operate for more than 25 years, and preceding several years of planning and construction are required. These are the time scales at which climate change impact on wind conditions will be noticeable. In this study, we present a new and efficient method to assess the impact of climate change on the economic performance indicators of wind park projects. We focus on three example projects in areas with significant investment potential, the Irish Sea (IS) in the United Kingdom, Morro Bay (MB) in California, USA, and the Princess Elisabeth Zone (PEZ), in Belgium. Offshore wind parks in these areas will be built in the years 2025-30 and between 2030-2040 [1], hence operation of the wind parks will last up to the 2070s, and possibly replacement wind park projects will last until the end of the century. For each of these areas, we use 19 different downscaled Global Climate Models to assess the impact on the wind resource, which is parameterized as a time-varying Weibull distribution, and consider two different greenhouse gas emission scenarios. With an example wind park project at each site, we calculate Gross AEP and Net AEP for each year between 2000 and 2099, using simplified assumptions for wake losses, electrical losses, etc. We also estimate the costs (CAPEX, OPEX) based on engineering and financial models and assumptions used in real projects. By combining the yearly production numbers with electricity pricing, project costs and interest rates, we estimate yearly project cash flows. Assuming a 25-year project lifetime, we use this to estimate the economic performance indicators (NPV, IRR) for each starting year between 2000 and 2075 keeping the pricing and interest parameters the same. In this way, we assess the sensitivity of the projects' performance indicators to projected changes in wind resource, conditioned on the project time window and the emissions scenario. We analyze the ensemble of climate model projections and interpret the resulting ensemble of economic performance indicators in terms of risks and opportunities. While projected decreasing trends in wind resource in the IS, MB, and PEZ sites in the second half of the century lead to a decline in the return rate of the projects starting from the 2030s onward, the range of uncertainty in climate projections allows for a nuanced consideration of worst-case and best-case scenarios. To summarize, the presented methodology assesses the investment risk of future wind park projects under changing climate conditions. It can be applied in different geographies and markets. References [1] Global Wind Energy Council. (2022). Global Offshore Wind Report 2022.