From Idealism to Pragmatism: Exploring the Cost Realities of Offshore Wind Development in Norway : A Monte Carlo Approach with Emphasis on Cost Uncertainties

This thesis addresses the inherent uncertainties associated with the cost of offshore wind deployment in Norway. The primary objective of this study is to provide a realistic estimation of the comprehensive cost involved in establishing and operating an offshore wind farm while investigating the influence of uncertainty in key cost variables. To achieve this objective, this study incorporates historical data from fully commissioned European offshore wind projects and employs Monte Carlo simulation to estimate the levelized cost of electricity. Furthermore, a sensitivity analysis is performed to explore the impact of fluctuations in key cost variables. The findings of this research unveil the potential for the LCOE of a Norwegian offshore wind farm to exceed previous assessments. This disparity may be attributed to the recent development of inflation and interest rates. Additionally, the analysis highlights the significant uncertainties inherent in cost estimation and emphasizes the substantial influence exerted by the variability in key cost variables. These observations emphasize the importance of considering the prevailing economic condition when evaluating offshore wind projects. Considering the Norwegian government’s ambitious plans to allocate significant offshore areas for wind energy generation, this research highlights the necessity of conducting a comprehensive assessment before deploying plans.nhhma