2018 Cost of Wind Energy Review: Tyler Stehly and Philipp Beiter

2018 Cost of Wind Energy Review
Tyler Stehly and Philipp Beiter

National Renewable Energy Laboratory
NREL is a national laboratory of the U.S. Department of Energy Technical Report

Office of Energy Efficiency & Renewable Energy NREL/TP-5000-74598
Operated by the Alliance for Sustainable Energy, LLC December 2019
This report is available at no cost from the National Renewable Energy
Laboratory (NREL) at www.nrel.gov/publications.
Contract No. DE-AC36-08GO28308

2018 Cost of Wind Energy Review
Tyler Stehly and Philipp Beiter
National Renewable Energy Laboratory
Suggested Citation
Stehly, Tyler, and Philipp Beiter. 2020. 2018 Cost of Wind Energy Review. Golden, CO:
National Renewable Energy Laboratory. NREL/TP-5000-74598.
https://www.nrel.gov/docs/fy20osti/74598.pdf.
NREL is a national laboratory of the U.S. Department of Energy Technical Report

Office of Energy Efficiency & Renewable Energy NREL/TP-5000-74598
Operated by the Alliance for Sustainable Energy, LLC December 2019
This report is available at no cost from the National Renewable Energy National Renewable Energy Laboratory
Laboratory (NREL) at www.nrel.gov/publications. 15013 Denver West Parkway
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Contract No. DE-AC36-08GO28308 303-275-3000 • www.nrel.gov
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Renewable Energy Wind Energy Technologies Office. The views expressed herein do not necessarily
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Acknowledgments
This work was supported by the U.S. Department of Energy (DOE) under Contract No. DE-
AC36-08GO28308 with the National Renewable Energy Laboratory (NREL). Funding for the
work was provided by the DOE Office of Energy Efficiency and Renewable Energy Wind
Energy Technologies Office (WETO). The authors would like to thank Patrick Gilman (WETO)
for supporting this research. Thanks also to Daniel Beals of Allegheny Science and Technology
(contractor to WETO) for reviewing prior versions of this manuscript and Richard Tusing
(NREL) for providing strategic guidance in the development of this work. Thank you to Ryan
Wiser and Mark Bolinger (Lawrence Berkeley National Laboratory) for their analysis of wind
project market data that informed this analysis and also to George Scott, Donna Heimiller, Nick
Grue, and Katy Waechter (NREL) for their work to develop the national wind supply curves.
Thanks also to Ben Maples (Mortenson Construction) for reviewing prior versions of this
manuscript. Finally, thanks to Eric Lantz (NREL) for his technical guidance, contributions, and
review of prior versions of this manuscript. Any remaining errors or omissions are the sole
responsibility of the authors.
iv
This report is available at no cost from the National Renewable Energy Laboratory at www.nrel.gov/publications.
List of Acronyms
AEP annual energy production
ATB Annual Technology Baseline
BOS balance of system
CapEx capital expenditures
CRF capital recovery factor
CSM Cost and Scaling Model
DOE U.S. Department of Energy
FCR fixed charge rate
GPRA Government Performance and Results Act
GW gigawatt
kW kilowatt
LCOE levelized cost of energy
m meter
m/s meters per second
MACRS Modified Accelerated Cost Recovery System
MW megawatt
MWh megawatt-hour
NREL National Renewable Energy Laboratory
O&M operation and maintenance
OpEx operational expenditures
ORCA Offshore Wind Regional Cost Analyzer
PTC production tax credit
SAM System Advisor Model
USD U.S. dollars
WACC weighted-average cost of capital
WETO Wind Energy Technologies Office
yr year
v
Executive Summary
This report uses representative utility-scale projects to estimate the levelized cost of energy
(LCOE) for land-based and offshore wind power plants in the United States. Data and results
detailed here are derived from 2018 commissioned plants. Analysis detailed here relies on recent
market data and state-of-the-art modeling capabilities to maintain an up-to-date understanding of
wind energy cost trends and drivers. This report represents the eighth annual installment and is
intended to provide insight into current component-level costs as well as a basis for
understanding variability in LCOE across the country.
The primary elements of this report include:
• Estimated LCOE for a representative, land-based wind project installed in a moderate

wind resource in the United States in 2018
• Estimated LCOE for representative offshore, fixed-bottom, and floating projects, in the
North Atlantic and Pacific Coast regions of the United States using National Renewable
Energy Laboratory (NREL) models and a database informed by projects installed in
Europe in 2018
• Sensitivity analyses showing the range of effects that basic LCOE variables could have
on the cost of wind energy for land-based and offshore wind power plants
• Updated national supply curves for land-based and offshore wind based on
geographically specific wind resource conditions paired with approximate wind turbine
size characteristics
• Updated fiscal year 2019 values for land-based and offshore wind used for Government
Performance and Results Act (GPRA) reporting as well as illustrated progress toward
established GPRA targets.
Key Inputs and Results

Throughout this report, the representative land-based and offshore project types are referred to as
“reference projects.” Table ES1, Table ES2, and Table ES3 summarize the basic LCOE inputs
and outputs for the reference land-based, fixed-bottom, and floating offshore wind projects, with
some additional detail about project capital expenditures (CapEx) and the respective turbine
capacity factor associated with the net annual energy production estimate. Unless specifically
stated, all data and analysis in the report are in 2018 U.S. dollars.
vi
Table ES1. Summary of the Land-Based Reference Project using 2.4-megawatt (MW) Wind
Turbines
2.4-MW Land-Based 2.4-MW Land-Based

Turbine Turbine
($/megawatt-hour
($/kilowatt [kW])
[MWh])
Turbine capital cost 1,011 20.8
Balance of system 332 6.8
Financial costs 127 2.6
CapEx 1,470 30.3
Operational expenditures (OpEx) ($/kW/year [yr]) 44 12.1

Fixed charge rate (real) [%] 7.5%
Net annual energy production (MWh/MW/yr) 3,648
Net capacity factor (%) 41.5%
TOTAL LCOE ($/MWh) 42
Table ES2. Summary of the Fixed-Bottom Reference Project using 5.5-MW Wind Turbines
5.5-MW Fixed-Bottom 5.5-MW Fixed-Bottom

Turbine Turbine
($/kW) ($/MWh)
Balance of system 2,498 33.0
CapEx 4,444 58.8
OpEx ($/kW/yr) 129 30.3

Total LCOE ($/MWh) 89
vii
Table ES3. Summary of the Floating Offshore Reference Project using 5.5-MW Turbines
5.5-MW Floating 5.5-MW Floating

Offshore Turbine Offshore Turbine
($/kW) ($/MWh)
CapEx 5,355 90.7
OpEx ($/kW/yr) 137 41.2

Note: GPRA values are not reported for floating technology.
In this report, 2018 installed land-based wind project data and costs are primarily obtained from
Wiser and Bolinger (2019). These data are supplemented with outputs from NREL’s cost models
for wind turbine and balance-of-system detail. The authors included an additional analysis that
models potential future turbine technologies in 2030 in this year’s report to inform the 2019
Annual Technology Baseline (NREL’s Annual Technology Baseline and Standard Scenarios
web page: atb.nrel.gov); details presented in Appendix C. The offshore reference project data are
estimated from installed 2018 global offshore projects, data collected from U.S.-proposed
projects, and market data from the existing international offshore wind industry. The assumed
wind resource regime and geospatial power plant characteristics (e.g., water depth and distance
from shore) for the offshore reference plants are comparable to sites on the U.S. North Atlantic
and Pacific Coast and are detailed in Appendix D.
The three major component LCOE categories and many subcategories including operations and
maintenance (O&M) are represented Figure ES1, Figure ES2, and Figure ES3. These figures
include wind turbine (e.g., wind turbine components), balance of system (e.g., development,
electrical infrastructure, assembly, and installation), and financial costs (e.g., insurance and
construction financing). The majority of the land-based reference project LCOE (49.2%) is in the
turbine itself, whereas the balance of system is the major contributor for the fixed-bottom and
floating offshore reference projects, making up 37.1% and 41.9%, respectively.
viii
Figure ES1. Component-level LCOE contribution for the 2018 land-based wind reference project
Note: O&M represents operation and maintenance
Figure ES2. Component-level LCOE contribution for the 2018 fixed-bottom offshore wind
reference project
ix
Figure ES3. Component-level LCOE contribution for the 2018 floating offshore wind reference
project
Figure ES4, Figure ES5, and Figure ES6 illustrate the LCOE associated with the land-based and
offshore reference power plants and provide a range of independent, single-variable sensitivities
showing how these variables affect cost and performance. More specifically, these figures show
the effect that CapEx, OpEx, net capacity factor, nominal discount rate, and project design life 1
have on the LCOE for both land-based and offshore wind projects. Reference project values of
$42/MWh for land-based wind, $89/MWh for fixed-bottom offshore wind, and $132/MWh for
floating offshore wind rely on inputs summarized in Table ES1 through Table ES3 and are
identified by the vertical white line in those figures. The figures also show sensitivity ranges
pulled from representative industry data contained in the “2018 Wind Technologies Market
Report” (Wiser and Bolinger 2019) for the LCOE inputs and the resulting calculated impacts on
LCOE for land-based wind. The sensitivity ranges for fixed-bottom and floating offshore are
informed by the “2018 Offshore Wind Technologies Market Report” (Musial et al. 2019) and
NREL’s offshore wind database. The ranges for land-based and offshore wind LCOE inputs vary
significantly (note the different axes in these figures). More detailed descriptions of the ranges
and assumptions are included in Section 4.7 (land-based wind) and Section 5.7 (offshore wind).
1
Project design life refers to the time in which the wind power plant is expected to operate (not referring to the
turbine’s design life for engineering or certification purposes).
x
Figure ES4. Land-based wind power plant assumptions and ranges for key LCOE input
parameters
Note: The reference LCOE represents the estimated LCOE for the NREL reference project. Changes in LCOE for a
single variable can be understood by moving to the left or right along a specific variable. Values on the x-axis
indicate how the LCOE will change as a given variable is altered, assuming that all others are constant. For example,
as capacity factor decreases toward 20%, the LCOE shown on the x-axis will increase accordingly to approximately
$88/MWh. Or, as the operational life for the reference project moves toward 35 years, the period in which a project
achieves the requisite cash flow it needs to recover its initial CapEx and meet investors’ internal rate of return
threshold is assumed to be 35 years; therefore, the resulting LCOE decreases to nearly $38/MWh.
Figure ES5. Fixed-bottom offshore wind power plant assumption and ranges for key LCOE input
parameters
xi
Figure ES6. Floating offshore wind power plant assumptions and ranges for key LCOE input
parameters
From the data provided earlier as well as the full body of work detailed in this report, we derived
the following key conclusions:
• Land-based wind power plant LCOE estimates continue to show a downward trend from
the “2010 Cost of Wind Energy Review” (Tegen et al. 2012) to the 2018 review. The
reference project LCOE for land-based installations was observed to be $42/MWh, 2 with
a range of land-based estimates from the single-variable sensitivity analysis covering
$33–$115/MWh. 3
• Offshore wind power plant LCOE estimates continue to decrease. The fixed-bottom
reference project offshore estimate is $89/MWh, and the floating substructure reference
project estimate is $132/MWh. These two reference projects give a single-variable
sensitivity range of $63–$176/MWh. This range is primarily caused by the large variation
in CapEx ($2,470–$6,500/kW), which is partially a function of water depth and distance
from shore, reported by project developers. More recent European and U.S. auction bids
suggest that costs for offshore wind could fall further in the coming years. 4
• Sensitivity analyses show that LCOE can vary widely based on changes in any one of
several key factors; however, the variable with the most dramatic effect on LCOE is
CapEx, followed by net capacity factor, then project design life for land-based projects,
and CapEx, followed by project design life, then net capacity factor for offshore projects.
2
As the production tax credit ramps down and expires in 2020, it is likely that wind project weighted-average cost
of capital or discount rate will be reduced as leverage increases and tax equity is replaced with cheaper debt.
3
LCOE estimates reflect a cost to a wind power plant developer and are not directly comparable with power
purchase agreements that reflect the sale of electricity.
4
Additional information on the recent European and U.S. auction bids can be found in the “2018 Offshore Wind
Technologies Market Report” (Musial et al. 2019).
xii
Table of Contents
Acknowledgments ..................................................................................................................................... iv
List of Acronyms ......................................................................................................................................... v
Executive Summary ................................................................................................................................... vi
Key Inputs and Results ............................................................................................................................. vi
List of Figures .......................................................................................................................................... xiii
List of Tables ............................................................................................................................................ xiv
1 Background ........................................................................................................................................... 1
2 U.S. Department of Energy Goals and Reporting Requirements .................................................... 3
3 Approach ............................................................................................................................................... 4
4 Land-Based Wind ................................................................................................................................. 6
4.1 Land-Based Reference Project ...................................................................................................... 6
4.2 Land-Based Capital Expenditures ................................................................................................. 6
4.3 Land-Based Technology Characteristics and Annual Energy Production .................................... 9
4.4 Land-Based Operation and Maintenance Expenditures .............................................................. 10
4.5 Land-Based-Wind Finance .......................................................................................................... 11
4.6 Land-Based-Wind Levelized Cost of Energy ............................................................................. 13
4.7 Land-Based-Wind Levelized Cost of Energy Sensitivities ......................................................... 15
4.8 Land-Based Supply Curve .......................................................................................................... 16
4.9 Land-Based-Wind Discussion of Results in Context of DOE Goals .......................................... 17
5 Offshore Wind ..................................................................................................................................... 20
5.1 Offshore Reference Project ......................................................................................................... 20
5.2 Offshore Capital Expenditures .................................................................................................... 21
5.3 Offshore Technology Characteristics and Annual Energy Production ....................................... 26
5.4 Offshore Operation and Maintenance Expenditures ................................................................... 28
5.5 Offshore Finance ......................................................................................................................... 28
5.6 Offshore Reference Project Levelized Cost of Energy ............................................................... 29
5.7 Offshore Levelized Cost of Energy Sensitivities ........................................................................ 32
5.8 Offshore Supply Curve................................................................................................................ 34
5.9 Offshore Discussion of Results in Context of DOE Goals.......................................................... 35
6 Conclusions and Future Work .......................................................................................................... 37
References ................................................................................................................................................. 39
Appendix A. Land-Based Wind 30-Year Financial Life Sensitivity ...................................................... 43
Appendix B. Offshore Wind 30-Year Financial Life Sensitivity ........................................................... 44
Appendix C. Land-Based Wind 2030 Turbine Technology Assessment ............................................. 45
Appendix D. Offshore Wind Reference Site Development ................................................................... 48
Appendix E. Offshore Wind Cost Model Updates .................................................................................. 50
Appendix F. Summary of Assumptions for 2018 Reference Projects ................................................. 51
List of Figures
Figure ES1. Component-level LCOE contribution for the 2018 land-based wind reference project . ix
Figure ES2. Component-level LCOE contribution for the 2018 fixed-bottom offshore wind
reference project.................................................................................................................................. ix
Figure ES3. Component-level LCOE contribution for the 2018 floating offshore wind reference
project .................................................................................................................................................... x
Figure ES4. Land-based wind power plant assumptions and ranges for key LCOE input
parameters ........................................................................................................................................... xi
Figure ES5. Fixed-bottom offshore wind power plant assumption and ranges for key LCOE input
parameters ........................................................................................................................................... xi
Figure ES6. Floating offshore wind power plant assumptions and ranges for key LCOE input
parameters .......................................................................................................................................... xii
Figure 1. CapEx for the land-based reference wind power plant project .............................................. 7
xiii
Figure 2. Component-level LCOE contribution for the 2018 land-based-wind reference project .... 14
Figure 3. Component-level LCOE breakdown for the 2018 land-based-wind reference project ...... 15
Figure 4. Sensitivity of land-based-wind LCOE to key input parameters ........................................... 15
Figure 5. National land-based-wind resource supply curve with 2018 U.S. installed projects......... 17
Figure 6. Pathway to LCOE reduction in 2030 by LCOE parameter .................................................... 18
Figure 7. Land-based wind GPRA cost trajectories for LCOE (in 2015 USD) ..................................... 19
Figure 8. Capital expenditures for the fixed-bottom offshore wind reference project ...................... 22
Figure 9. Capital expenditures for the floating offshore wind reference project ............................... 24
Figure 10. Component-level LCOE contribution for the 2018 fixed-bottom offshore wind reference
project .................................................................................................................................................. 30
Figure 11. Component-level cost breakdown for the 2018 fixed-bottom offshore wind reference
project .................................................................................................................................................. 31
Figure 12. Component-level LCOE contribution for the 2018 floating offshore wind reference
project .................................................................................................................................................. 32
Figure 13. Component-level cost breakdown for the 2018 floating offshore wind reference project
.............................................................................................................................................................. 32
Figure 14. Sensitivity of fixed-bottom offshore wind LCOE to key input parameters ....................... 33
Figure 15. Sensitivity of floating offshore wind LCOE to key input parameters ................................ 33
Figure 16. National fixed-bottom and floating offshore wind supply curve ....................................... 35
Figure 17. Fixed-bottom wind GPRA cost trajectories for LCOE ......................................................... 36
Figure 18. Fixed-bottom cost reductions in GPRA cost trajectories for LCOE .................................. 36
List of Tables
Table ES1. Summary of the Land-Based Reference Project using 2.4-megawatt (MW) Wind
Turbines ............................................................................................................................................... vii
Table ES2. Summary of the Fixed-Bottom Reference Project using 5.5-MW Wind Turbines ........... vii
Table ES3. Summary of the Floating Offshore Reference Project using 5.5-MW Turbines ............. viii
Table 1. Land-Based Wind GPRA Baseline and Target LCOE ............................................................... 3
Table 2. Offshore Fixed-Bottom Wind GPRA Baseline and Target LCOE ............................................. 3
Table 3. Land-Based Reference Project Parameters ............................................................................... 6
Table 4. Land-Based CapEx and LCOE Breakdown ................................................................................ 8
Table 5. Reference Land-Based Turbine Parameters .............................................................................. 9
Table 6. Reference Land-Based-Wind Resource Assumptions ........................................................... 10
Table 7. Reference Land-Based-Wind Losses and Availability Assumptions .................................... 10
Table 8. Reference Land-Based-Wind Power Plant AEP and Capacity Factor Summary ................. 10
Table 9. Land-Based-Wind Reference Project OpEx ............................................................................. 11
Table 10. Summary of Land-Based-Wind Reference Project Economic Evaluation Metrics ............ 13
Table 11. Summary of Inputs and Reference Project LCOE for 2018 Land-Based Installations ...... 14
Table 12. Offshore Reference Project Parameters (Fixed-Bottom and Floating Substructures) ..... 21
Table 13. Fixed-Bottom Offshore CapEx and LCOE Breakdown ......................................................... 23
Table 14. Floating Offshore CapEx and LCOE Breakdown .................................................................. 25
Table 15. Reference Offshore Turbine Parameter Input Assumptions ............................................... 26
Table 16. Reference Offshore Wind Resource Input Assumptions ..................................................... 27
Table 17. Reference Offshore Wind Total Losses ................................................................................. 27
Table 18. Reference Offshore Wind Net Annual Energy Production ................................................... 27
Table 19. Offshore Wind Reference Project OpEx ................................................................................. 28
Table 20. Summary of Offshore Reference Project Economic Evaluation Metrics ............................ 29
Table 21. Fixed-Bottom Offshore Wind LCOE and Reference Projects Cost Breakdown ................. 29
Table 22. Floating Offshore Wind LCOE and Reference Projects Cost Breakdown .......................... 31
Table 23. Range of LCOE for U.S. Land-Based and Offshore Wind in 2018 ....................................... 37
Table A1. Summary of Land-Based Capital Recovery Factor, Fixed Charge Rate, and Levelized
Cost of Energy for a 30-Year Useful Life .......................................................................................... 43
Table B1. Summary of Offshore Capital Recovery Factor, Fixed Charge Rate, and Levelized Cost
of Energy for a 30-Year Useful Life ................................................................................................... 44
Table C1. Summary of Projected Technology Characteristics for the 2030 Representative Turbines
xiv
.............................................................................................................................................................. 45
Table C2. Summary of Modeled Capital Costs for the 2030 Representative Wind Plants ................ 46
Table C3. Summary of Assumed Operation and Maintenance Costs for the 2030 Representative
Wind Plants ......................................................................................................................................... 46
Table C4. Summary of Calculated Net Capacity Factors for the 2030 Representative Wind Plants 47
Table C5. Summary of Assumed Fixed Charge Rate and Calculated Levelized Cost of Energy for
the 2030 Representative Wind Plants ............................................................................................... 47
Table D1. Spatial Parameters for Regional Reference Sites ................................................................ 49
Table F1. Land-Based-Wind Reference Project Levelized Cost of Energy (LCOE) Assumptions .... 51
Table F2. Fixed-Bottom Offshore Wind Reference Project LCOE Assumptions................................ 53
Table F3. Floating Offshore Wind Reference Project LCOE Assumptions ......................................... 55
xv
1 Background
This report estimates the levelized cost of energy (LCOE) for land-based and offshore wind
projects in the United States. LCOE is a metric used to assess the cost of electricity generation
and the total power-plant-level impact from technology design changes and can be used to
compare costs of all types of generation. The specific LCOE method applied in this analysis is
described in “A Manual for the Economic Evaluation of Energy Efficiency and Renewable
Energy Technologies” (Short et al. 1995).
This report provides an update to the “2017 Cost of Wind Energy Review” (Stehly et al. 2018)
and a look at the 2018 wind industry LCOE, turbine costs, financing, and market conditions.
More specifically, this 2018 report includes:
• Estimated LCOE for a representative, land-based wind project installed in a moderate

wind resource (i.e., average wind power class 4) in the United States in 2018
• Estimated LCOE for representative offshore (fixed-bottom and floating) projects using
National Renewable Energy Laboratory (NREL) models and databases of globally
installed projects. Representative sites on the U.S. North Atlantic Coast (fixed-bottom)
and Pacific Coast (floating) were assessed using lease and call for information and
nominations data from the Bureau of Ocean Energy Management as well as various
geospatial data sets
• Sensitivity analyses showing the range of effects that basic LCOE variables could have
on the cost of wind energy for land-based and offshore wind power plants
• Updates to the national supply curves for land-based and offshore wind based on
geographically specific wind resource conditions paired with approximate wind turbine
size characteristics
• Projected land-based and offshore wind cost trajectories from 2018 through 2030 used for
U.S. Department of Energy (DOE) annual wind power LCOE reporting as required by
the Government Performance and Results Act (GPRA).
This report addresses a number of assumptions and cost variables but does not include the full
spectrum of drivers that affect wind energy prices. For example, it does not consider policy
incentives (such as the production tax credit [PTC]), factors from underlying economic
conditions (such as an economic recession), the cost of building long-haul interstate
transmission, or potential grid integration costs. These important variables can have an impact by
increasing or decreasing project costs or delaying projects. Nevertheless, their exclusion is
consistent with past economic analyses conducted by NREL (Stehly et al. 2018), as LCOE is not
traditionally defined as a measure of all societal costs and benefits associated with power
generation resources.
The standard Annual Technology Baseline (ATB) LCOE equation (NREL’s Annual Technology
Baseline and Standard Scenarios web page: atb.nrel.gov) can be simplified for each technology.
1
For wind, the following equation is used to calculate LCOE:
(CapEx × FCR) + OpEx

LCOE = (1)
(AEPnet /1,000)
where
LCOE = levelized cost of energy ($/megawatt-hour [MWh])
FCR = fixed charge rate (%)
CapEx = capital expenditures ($/kilowatt [kW])
AEPnet = net average annual energy production (MWh/megawatt [MW]/year [yr])
OpEx = operational expenditures ($/kW/yr).
The first three basic inputs into the LCOE equation—capital expenditures (CapEx), operational
expenditures (OpEx), and net average annual energy production (AEPnet)—enable this equation
to capture system-level impacts from design changes (e.g., larger rotors or taller wind turbine
towers). The fourth basic input—a fixed charge rate (FCR)—represents the amount of revenue
required to pay the annual carrying charges as applied to the CapEx on that investment during
the expected project economic life. All analysis and LCOE results are in 2018 U.S. dollars
(USD) throughout this report unless otherwise noted. The upcoming sections define the approach
to calculating the LCOE following the respective NREL system cost breakdown structures to
organize data. This report also describes each component of the LCOE equation (such as CapEx,
OpEx, AEP, and FCR), the market context, and a range of data for typical U.S. wind projects in
2018.
2
2 U.S. Department of Energy Goals and Reporting
Requirements
Every year, the DOE Wind Energy Technologies Office (WETO) reports the LCOE for land-
based and fixed-bottom offshore wind to satisfy GPRA reporting requirements. The annually
reported LCOE values are measured against current year and future LCOE targets set by WETO.
The official GPRA levelized cost of energy end-point targets presented in this report were set in
2015 for land-based wind and updated in 2019 for fixed-bottom offshore wind. Updates to the
LCOE targets are periodically implemented to keep performance measures current with
developments in the market and reduce the impact of inflation on LCOE for land-based and
offshore wind projects. The GPRA targets are based on trajectories for land-based and fixed-
bottom offshore 5 wind projects that span from the current year to 2030. A summary of the GPRA
targets for land-based wind is shown in Table 1 and for offshore fixed-bottom wind in Table 2. It
is required that each year the actual costs for land-based and fixed-bottom wind LCOE be
reported against the GPRA targets. This report provides the cost data to DOE to meet the annual
reporting requirement required by the GPRA. The assumptions and calculations for land-based
wind and fixed-bottom offshore wind projects used in GPRA reporting are presented in more
detail in Section 4.9 and Section 5.9, respectively.
Table 1. Land-Based Wind GPRA Baseline and Target LCOE
2016 (Baseline) 2030 (Target)
Land-based LCOE (2015$/MWh) 56 23
Note: The GPRA baseline and target levelized cost of energy in Table 1 are reported in 2015 USD for land-based
wind because WETO will report land-based wind values in 2015 USD.
Table 2. Offshore Fixed-Bottom Wind GPRA Baseline and Target LCOE
2019 (Baseline) 2030 (Target)

Offshore fixed-bottom LCOE (2018$/MWh) 89 51
Note: The GPRA baseline and target levelized cost of energy in Table 2 are reported in 2018 USD because WETO
will report offshore fixed-bottom wind values in 2018 USD.
5
WETO does not report GPRA costs or targets for floating offshore wind.
3
3 Approach
This “2018 Cost of Wind Energy Review” applies a similar approach as the past cost of wind
energy review reports (Tegen et al. 2012, 2013; Moné et al. 2015a, 2015b, 2017; Stehly et al.
2017, 2018). The analysis uses a number of data sources and models to estimate the cost of wind
energy. All models and data have, at some point, been tested, documented, and verified within
NREL, other national laboratories, universities, and industry to ensure that the methodology and
tools are as accurate as possible. The land-based wind data use the annually released “Wind
Technologies Market Report” authored by Lawrence Berkeley National Laboratory. Specific to
the “2018 Cost of Wind Energy Review,” the data come from Wiser and Bolinger (2019). The
market data supporting the offshore wind analysis are limited to international projects and
proposed U.S. projects reported in the “2018 Offshore Wind Technologies Market Report”
(Musial et al. 2019) and stored in NREL’s offshore wind database 6 of global offshore projects.
Given the market and model data available, the general approach to estimating the levelized cost
of wind energy includes:
• Evaluating market conditions and data for projects that have been installed in the United
States in a given year to understand total land-based CapEx, AEP, annual OpEx for
recently installed projects, and representative turbine technology. Representative turbine
characteristics (i.e., rating, rotor diameter, and hub height) are taken as market averages.
Accordingly, LCOE estimates reflect average empirical conditions to the extent possible.
• Evaluating market conditions and data for projects that have been installed in Europe and
Asia when considering offshore wind technology in a given year to understand total
CapEx, OpEx, and representative turbine technology. AEP and balance-of-system (BOS)
costs are modeled using the specified U.S. North Atlantic site conditions. The primary
sources for these data are NREL’s offshore wind database and the “2018 Offshore Wind
Technologies Market Report” (Musial et al. 2019).
• Supplementing available market data with modeled data based on a representative or
reference project that reflects technology and project parameters for a given year. We
used the following suite of NREL models to complete the LCOE analysis:
o The 2015 Cost and Scaling Model 7 (CSM). We used the CSM to estimate land-
based wind turbine component costs using scaling relationships at the component
level (e.g., blade, hub, generator, and tower) that reflect the component-specific and
often nonlinear relationships between size and cost.
o The Land-Based-Wind BOS model.8 We used the BOS model to estimate all other
components of the wind power plant other than the turbine’s tower and rotor nacelle
assembly using scaling relationships based on empirical data obtained from a land-
based wind developer and wind industry stakeholders.
6
NREL’s offshore wind database is used as an internal reference and is not publicly available.
7
NREL’s 2015 Cost and Scaling Model is used as an internal reference and is not publicly available.
8
NREL’s Land-Based-Wind Balance of System model is used as an internal reference and is not publicly available.
4
o The NREL Offshore Wind Cost Model 9 (Beiter et al. 2016), which is also referred
to as the Offshore Wind Regional Cost Analyzer (ORCA). We used ORCA to
estimate offshore turbine costs using scaling relationships from collected global
offshore wind industry empirical data and to estimate offshore wind power plant
losses and availability.
o The System Advisor Model (SAM) (NREL’s System Advisor Model web page:
https://sam.nrel.gov/). We used SAM to estimate net energy production for land-
based wind and ORCA to estimate net energy production for offshore wind power
plants based on turbine rated capacity, rotor diameter, hub height, and a
representative wind resource.
• Combining the market data and modeled data described earlier to estimate the primary
elements necessary to calculate LCOE (i.e., CapEx, OpEx, AEP, and FCR) and provide
details about wind technology costs and performance that are aligned with market data
but reported at a more detailed resolution. Unless specifically stated, all data and analysis
used in this report are in 2018 USD, taking into account changes resulting from inflation
from previous reports.
9
We implement continual updates to the NREL Offshore Wind Cost Model to best align with current offshore wind
industry data. The NREL Offshore Wind Cost Model is also referred to as the Offshore Regional Cost Analyzer
(ORCA) and is used in other forthcoming NREL publications. Details on the updates are presented in Appendix E.
5
4 Land-Based Wind
The turbine characteristics used in the land-based wind reference project were derived from the
“2018 Wind Technologies Market Report” (Wiser and Bolinger 2019). Reference project wind
turbine and component costs are based on a hypothetical wind turbine that comprises the average
parameters—nameplate capacity, rotor diameter, and hub height—of turbines that were installed
in the United States in 2018. This type of turbine rests on a standard spread-foot foundation
design and incorporates a three-stage planetary/helical gearbox feeding a high-speed
asynchronous generator. The 2018 reference project wind regime is intended to reflect an
average wind power class 4 (NREL’s Renewable Resource Data Center web page:
https://rredc.nrel.gov/wind/pubs/atlas/tables/1-1T.html) wind resource site that is consistent with
prior versions of this report and a typical plant size of 200 MW. An additional analysis
performing a bottom-up cost estimate on land-based wind technology in 2030 was used to inform
the 2019 ATB (NREL’s Annual Technology Baseline and Standard Scenarios web page:
atb.nrel.gov). The details of the analysis are documented in Appendix C.
4.1 Land-Based Reference Project
The land-based reference project is intended to represent a wind site found in the interior region
of the United States. The wind power plant specific to this analysis consists of 83 wind turbines
that are each rated at 2.4 MW (based on the average turbine size installed in the United States in
2018), equating to a 200-MW wind power plant capacity. These reference project parameters are
summarized in Table 3. Further detail on the turbine parameters are summarized in Table 5. The
wind power plant layout is roughly placed in a grid layout at an elevation around 450 meters (m)
above sea level. The wind power plant is assumed to be operating for 25 years with no
catastrophic operation and maintenance (O&M) events.
Table 3. Land-Based Reference Project Parameters
Project Parameters
Turbine rated power (MW) 2.4
Number of turbines 83
Wind plant capacity (MW) 200
Altitude above mean sea level (measured at turbine foundation [m]) 450
Project design life (years) 25
Note: Project design life refers to the time in which the wind power plant is expected to operate (not referring to the turbine’s
design life for engineering or certification purposes).
4.2 Land-Based Capital Expenditures

The weighted-average CapEx data are published annually by DOE (Wiser and Bolinger 2019).
We used the NREL 2015 CSM to determine the component cost breakdown given the total
CapEx cost estimates reported by Wiser and Bolinger (2019). The NREL 2015 CSM uses curve
fits from commercial turbine component design and cost data while providing the ability to
adjust inputs, such as overhead, profit, and transportation. Figure 1 illustrates the breakdown of
CapEx for the NREL land-based reference project. In the figure, the CapEx component
percentages highlighted in shades of green capture the turbine capital cost, the percentages
highlighted in blue capture the BOS share of capital costs, and the components highlighted in
6
purple capture the financial CapEx. For information on the assumptions and inclusions of the
individual components, see the “2013 Cost of Wind Energy Review” (Moné et al. 2015a). Some
costs, such as transportation, are rolled up into higher categories (such as nacelle and blades), as
the specific data are difficult to obtain based on a theoretical reference site and an unspecified
turbine manufacturer.
Figure 1. CapEx for the land-based reference wind power plant project
Table 4 summarizes the costs for the reference project’s individual components (including their
contribution to LCOE). More details on the representative wind power plant’s energy production
and financial assumptions used to calculate LCOE are provided in Section 4.3 and Section 4.5,
respectively.
7
Table 4. Land-Based CapEx and LCOE Breakdown

Turbine Turbine
($/kW) ($/MWh)
Rotor module 293 6.0
Blades 188 3.9
Pitch assembly 61 1.3
Hub assembly 45 0.9
Nacelle module 498 10.3

Nacelle structural assembly 100 2.1
Drivetrain assembly 195 4.0
Nacelle electrical assembly 170 3.5
Yaw assembly 33 0.7
Tower module 219 4.5
Development cost 16 0.3

Engineering and management 19 0.4
Foundation 60 1.2
Site access and staging 45 0.9
Assembly and installation 45 0.9
Electrical infrastructure 148 3.0
Construction financing cost 39 0.8
Contingency fund 88 1.8
Total capital expenditures 1,470 30.3
Because of CapEx variability among projects, we established estimates for the turbine
component costs using the NREL 2015 CSM. We estimated BOS costs using NREL’s Land-
Based-Wind BOS model, which relies on scaling relationships and costs derived from detailed
data obtained through a major engineering, procurement, and construction firm active in the
wind industry to characterize costs. Construction financing was estimated assuming a 3-year
construction duration and distributing the capital and interest over the 3 years using the same
methodology as NREL’s 2019 ATB for land-based wind. We estimated the project contingency
at 6% of CapEx, which is consistent with industry reporting. Total installed project CapEx for
U.S. projects in 2018 came in at $1,470/kW (Wiser and Bolinger 2019), which is a decrease from
8
last year’s cost report of $1,649/kW 10 primarily from lower turbine prices in reported installed
project costs in 2018.
4.3 Land-Based Technology Characteristics and Annual Energy

Production
4.3.1 Turbine Parameters
For the purpose of this report, the turbine parameters are specific to the turbine and independent
of the wind resource characteristics. These parameters consist not only of turbine size (such as
rated power, rotor diameter, and hub height), but also of turbine operating characteristics (such
as coefficient of power, maximum tip speed, maximum tip-speed ratio, and drivetrain design).
Because the three-stage planetary/helical gearbox with a high-speed asynchronous generator-
style drivetrain topology dominates the U.S. market, this type of drivetrain was selected for the
baseline turbines used in this analysis. The power curve for the 2.4-MW land-based turbine is
derived from NREL’s SAM (NREL’s System Advisor Model web page: https://sam.nrel.gov/). A
summary of the turbine parameters is shown in Table 5. For specific approaches regarding
additional turbine parameters (e.g., power curves), see the “2010 Cost of Wind Energy Review”
(Tegen et al. 2012).
Table 5. Reference Land-Based Turbine Parameters
Turbine Parameters
Turbine rotor diameter (m) 115.6
Turbine hub height (m) 88.1
Maximum rotor tip speed (meters per second [m/s]) 80
Tip-speed ratio at maximum coefficient of power (Cp) 8
Drivetrain design Geared
Cut-in wind speed (m/s) 3
Cut-out wind speed (m/s) 25
Maximum coefficient of power 0.47
4.3.2 Wind Resource

The average wind speed can vary from project to project across the United States. The annual
average wind speed chosen for the reference project analysis, consistent with prior reports, is
7.25 meters per second (m/s) at 50 m above ground level (7.86 m/s at a hub height of 88.1 m).
This wind speed is intended to be generally indicative of the wind regime for projects installed in
moderate-quality sites (i.e., average wind power class 4). We applied an elevation of 450 m
above sea level based on this concept of using a representative site that would have a similar
altitude to a project located within the interior of the country. A summary of the wind resource
assumptions for the 2018 representative site is included in Table 6.
10
For comparison purposes, last year’s CapEx was inflated from 2017 USD to 2018 USD assuming a 2.4%
cumulative rate of inflation from the Bureau of Labor and Statistics (undated).
9
Table 6. Reference Land-Based-Wind Resource Assumptions
Wind Resource Characteristics
Annual average wind speed at a 50-m height (m/s) 7.25
Annual average wind speed at an 88.1-m hub height (m/s) 7.86
Weibull k 2.0
Shear exponent 0.143
Turbine elevation (meters above sea level) 450
4.3.3 Losses and Availability

Although some losses can be affected by turbine design or wind resource characteristics, they are
treated as independent of any other input in this simplified analysis. Types of losses accounted
for here include array wake losses, electric collection and transmission losses (from the
substation to the point of interconnection), and blade soiling losses, totaling 15%. A wind power
plant availability of 98% is assumed, indicating that the wind project is ready to produce power
between wind turbine cut-in and cut-out wind speeds 98% of the time. Net average AEP is
calculated by applying all losses and availability to the gross AEP. Table 7 shows the estimated
losses and availability for the land-based reference wind power plant.
Table 7. Reference Land-Based-Wind Losses and Availability Assumptions
Losses
Losses (i.e., array, energy conversion, and line) 15%
Availability 98%
4.3.4 Annual Energy Production

The AEP for this analysis was computed using SAM. The model uses an idealized power curve
based on the turbine configuration and computes annual energy capture for a wind project that is
specified by the wind resource and the wind power plant’s assumed losses and availability. The
result of these calculations yields a net energy capture of 3,648 MWh/MW/year, which
corresponds to a 41.6% net capacity factor assuming 8,760 hours in a year. For reference, the
generation-weighted average capacity factor for the interior region reported by Wiser and
Bolinger (2019) in calendar year 2018 is 43.1% for projects built from 2014 to 2017. The net
energy capture and net capacity factor for the reference wind plant are shown in Table 8.
Table 8. Reference Land-Based-Wind Power Plant AEP and Capacity Factor Summary
AEP and Capacity Factors
7.25 m/s at 50 m
Net energy capture (MWh/MW/year) 3,648
4.4 Land-Based Operation and Maintenance Expenditures

OpEx costs are generally expressed in two categories: 1) fixed O&M costs (e.g., scheduled plant
maintenance or land lease costs) and 2) variable O&M costs (e.g., unscheduled plant
maintenance). For simplicity, annual OpEx can be converted to a single term and expressed as
10
either dollars per kilowatt per year ($/kW/yr) or dollars per megawatt-hour ($/MWh). This
analysis uses the dollars-per-kilowatt-per-year convention. Unfortunately, O&M market data are
not widely available; therefore, the recent U.S. wind industry survey, “Assessing wind power
operating costs in the United States: Results from a survey of wind industry experts” (Wiser et
al. 2019) is used to inform the O&M cost estimates for the representative wind plant. For
recently installed projects, entering commercial operations from 2015 through 2018, the survey
results anticipate an average range of O&M costs between $33 and $59/kW/yr. The average
across respondents was ~$44/kW/yr and is assumed to be the all-in levelized OpEx for the
representative project. 11 The annual O&M cost from the expert survey and the calculated O&M
cost on an energy basis for the representative wind plant is shown in Table 9.
Table 9. Land-Based-Wind Reference Project OpEx

Turbine Turbine
($/kW/yr) $/MWh
OpEx 44 12.1
4.5 Land-Based-Wind Finance

This section describes the financing assumptions for the report’s representative land-based-wind
reference project in the United States in 2018. It is important to distinguish between financing
assumptions and financial costs. Financial costs, which are part of CapEx according to the
system cost breakdown structure, include items such as insurance, contingency, and reserve
accounts. Financing assumptions, on the other hand, refer to the cost of interest and other
carrying charges, corporate taxes, and depreciation (represented by the FCR in this report),
applied to the total CapEx. To capture the financing structure and costs, a fixed charge rate,
detailed in Section 4.5.2, is used for the LCOE equation.
4.5.1 Discount Rate

Typically, various financial terms, such as the cost of debt or equity, are captured in the discount
rate, which is in turn used to estimate the cost of energy. For this analysis, we calculate the
discount rate as the after-tax weighted-average cost of capital (WACC) and we presume that the
reported yields for equity are after-tax yields and can be used directly in the WACC calculation.
The cost of debt (as a value) is also reported, but because interest on debt is tax deductible, we
use an effective corporate marginal tax rate to determine an after-tax cost of debt for the discount
rate calculation. The cost of capital data collected by Lawrence Berkeley National Laboratory
(Wiser and Bolinger 2019) gives a basis for WACC assumptions for the representative wind
project in 2018 and results in a nominal WACC of 7.59%. This WACC was derived assuming a
debt fraction of 51%, nominal debt interest rate of 4.5%, nominal return on equity of 12%, and a
26% tax rate. 12 Each actual project, however, has a unique risk profile, financing terms, and
ownership structure. For this reason, a single WACC representing the entire fleet of 2018 wind
11
Given the scarcity and varying quality of the data, OpEx may vary substantially among projects, and the data
included here may not fully represent the challenges that OpEx present to the wind power industry.
12
Because these data are derived from installed projects in 2018, they include the impact of the PTC on the debt
ratio even though the LCOE estimates do not include the PTC.
11
installations should be viewed cautiously and used to illustrate general market trends and
conditions only.
In financial modeling, corporate tax rates are often presented as a composite, or effective, tax
rate. This rate is calculated from a blend of the highest marginal corporate tax rate of 21% 13 and
an approximate typical state corporate tax rate. Because state taxes are typically deductible
expenses on federal tax returns, the blended rate is represented as 26% reported in NREL’s ATB.
Wind projects are often organized as disregarded entities for tax purposes (i.e., no taxes are paid
by the project entity) and taxes are paid further up the organizational structure at some corporate
level.
The inflation rate has been set to 2.5%. This rate aligns with the inflation rate provided in
NREL’s ATB. Discount rates are initially calculated in nominal after-tax USD, and an estimate
of inflation is used to calculate a discount rate in real after-tax USD.
Although the PTC is a critical component for wind projects installed in 2018, it is expected to
phase out in future years. 14 Research has shown that one likely outcome of the termination of the
PTC is increased project leverage, which will reduce the higher-cost tax-equity portion of project
finance. This shift of capital structure is expected to partially offset the impact of the lack of PTC
(Bolinger 2014). For example, assuming that project leverage increases from 40% to 60% results
in a reduction in nominal after-tax WACC of over 1 percentage point (Mai et al. 2015).
4.5.2 Economic Evaluation Metrics

In the economic evaluation of wind energy investments there are two important metrics: the
capital recovery factor (CRF) and FCR. The FCR represents the amount of annual revenue
required to pay the carrying charge 15 as applied to the CapEx on that investment during the
expected project economic life. 16 The FCR is based on the CRF but also reflects corporate
income taxes and depreciation. The ATB methodology is used to calculate the FCR.
The CRF is defined as “the uniform periodic payment, as a fraction of the original investment
cost that will fully repay a loan including all interest, over the term of the loan” (Short et al.
1995). The CRF can be thought of as the recurring fixed payment over the life of a loan common
to most types of mortgages. For example, a $100 loan at 8% interest amortized over 20 years
13
The U.S. tax reform bill passed and signed into law in December 2017 (Tax Cuts and Jobs Act, H.R. 1) lowers the
corporate tax rate from 35% to 21%; hence, the 21% corporate tax rate is used in this year’s report assuming the
final investment decisions for projects commissioned in 2018 would have been made under the reformed corporate
tax rate.
14
“In December 2015, Congress passed a 5-year phased-down extension of the PTC. To qualify, projects must begin
construction before January 1, 2020. In May 2016, the IRS issued guidance allowing four years for project
completion after the start of construction, without the burden of having to prove continuous construction. In
extending the PTC, Congress also included a periodic reduction in the value of the credit for projects starting
construction after 2016. Specifically, the PTC will phase down in increments of 20 percentage points per year for
projects starting construction in 2017 (80% PTC), 2018 (60%), and 2019 (40%)” (Wiser and Bolinger 2016).
Although the PTC was scheduled to phase out completely by the end of 2019, a change to the year-end tax package
in 2019 has extended the PTC through the end of 2020 (40%) (Amendment to Rules Committee Print 116-44. Sec.
127 [2019]).
15
Carrying charges include the return on debt, return on equity, taxes, and depreciation.
16
The FCR does not allow for detailed analysis of specific financing structures; however, these structures can be
represented through the use of a WACC as the discount rate input.
12
requires a constant annual payment of $10.18 (equivalent to the CRF). Notably, the CRF ignores
the impact of corporate income taxes, thus is applicable to a no-tax investment scenario, such as
from a government investment.
A reasonable assumption for land-based wind projects is that 95% of the project capital cost is
eligible for 5-year (Modified Accelerated Cost Recovery System [MACRS]) depreciation, and
the balance of the project capital cost is eligible for 15-year MACRS. In this work, the MACRS
assumption is further simplified by assuming that 100% of the wind project cost basis is eligible
for 5-year MACRS.
Table 10 presents the estimated WACC, CRF, and FCR in nominal and real terms using the
after-tax WACC discount rate of 7.59% and 4.96%, respectively, a project design lifetime of 25
years, and a net present value depreciation factor of 82% (assuming a 5-year MACRS
depreciation schedule). The nominal and real CRF are estimated at 9.04% and 7.07%,
respectively. The nominal FCR is estimated at 9.6% and the real FCR is estimated at 7.51%. As
noted in Short et al. (1995), comparisons of two or more capital investments should be on a
consistent tax treatment basis (i.e., both investments using a before-tax method or an after-tax
method).
Table 10. Summary of Land-Based-Wind Reference Project Economic Evaluation Metrics
Nominal Real
Weighted-average cost of capital (%) 7.6% 5.0%
Capital recovery factor (%) 9.0% 7.1%
Fixed charge rate (%) 9.6% 7.5%
4.6 Land-Based-Wind Levelized Cost of Energy

The levelized cost of energy for the 2018 representative land-based wind power plant is
calculated using the formulation presented in NREL’s ATB and the representative turbine
technology parameters, site conditions, wind resource, and cost estimates (i.e., CapEx, FCR,
OpEx, and AEP). The LCOE value for the 2018 representative plant is estimated at $42/MWh.
Table 11 summarizes the costs for the primary components on a per-kilowatt and per-megawatt-
hour basis. The graphic in Figure 2 illustrates the LCOE breakdown for the primary components
of the representative wind plant, whereas Figure 3 depicts the absolute LCOE values for each of
the components.
13
Table 11. Summary of Inputs and Reference Project LCOE for 2018 Land-Based Installations

Turbine Turbine
($/kW) ($/MWh)
CapEx 1,470 30.3
OpEx ($/kW/yr) 44 12.1

TOTAL LCOE ($/MWh) 42
Figure 2. Component-level LCOE contribution for the 2018 land-based-wind reference project
14
Figure 3. Component-level LCOE breakdown for the 2018 land-based-wind reference project
4.7 Land-Based-Wind Levelized Cost of Energy Sensitivities

The input parameters described earlier reflect the land-based reference wind project; however,
input parameters for a near-term wind project are subject to considerable uncertainty. As a result,
it is beneficial to investigate how this variability may impact the LCOE. The sensitivity analysis
shown in Figure 4 focuses on the basic LCOE inputs: CapEx, OpEx, capacity factor (a surrogate
for AEP), and FCR, which is broken into its principal elements: discount rate and economic
operational lifetime.
Figure 4. Sensitivity of land-based-wind LCOE to key input parameters

Note: The reference LCOE reflects a representative industry LCOE. Changes in LCOE for a single variable can be understood by
moving to the left or right along a specific variable. Values on the x-axis indicate how the LCOE will change as a given variable
is altered and all others are assumed constant (i.e., remain reflective of the reference project).
15
Sensitivity analyses are conducted by holding all reference project assumptions constant and
altering only the variable in question. Sensitivity ranges for all parameters except for project
design life are pulled from representative industry data or analysis contained in the “2018 Wind
Technologies Market Report” (Wiser and Bolinger 2019). This selection of ranges provides
insight into how real-world ranges influence LCOE. Keeping the same 200-MW project size, the
sensitivity analysis yields ranges in LCOE from a low of $33/MWh to a high of $115/MWh—a
low-to-high delta of $82/MWh. Within the ranges shown, CapEx has the greatest impact on land-
based-wind LCOE followed by impacts from net capacity factor and then project design life.
Project CapEx appears to have the greatest influence with respect to decreasing the LCOE
relative to the reference project driven by reductions in reported installed project costs from
lower turbine prices.
4.8 Land-Based Supply Curve

The land-based supply curve illustrates LCOE across the contiguous United States using the
2018 market data from Wiser and Bolinger (2019) and the Wind Integration National Dataset
Toolkit (Wind Integration National Dataset Toolkit web page: https://www.nrel.gov/grid/wind-
toolkit.html). The toolkit provides meteorological conditions for more than 126,000 sites in the
continental United States for the years 2007 to 2013. The LCOE for each of the potential wind
power plant locations is computed using a site-specific CapEx and net AEP using a geographic-
information-system-based algorithm. The estimated theoretical capacity for the United States is
calculated to be just under 10,000 gigawatts (GW), assuming a wind power plant density of 3
MW/kilometer2. The LCOE calculated for this theoretical capacity ranges from $31/MWh for the
best sites in the United States and extends beyond $200/MWh for nonideal sites. Figure 5 shows
this supply curve. For illustrative purposes, the LCOE is calculated for the land-based wind
projects installed in 2018 using the same site-specific methodology for the 126,000 theoretical
locations, which are shown on the supply curve (marked by green circles). In the figure, most of
the installed projects in 2018 are grouped near the left side of the supply curve, where LCOE
values are lowest, with fewer scattered when moving toward the right of the supply curve with
higher LCOE values. Also shown is the calculated LCOE for the reference land-based wind
project (indicated by the orange diamond), which is based on the 2018 market data from Wiser
and Bolinger (2019) and the representative wind site characteristics.
It is important to note that the potential wind power plant capacity available over a range of
LCOE varies by geographic region primarily because of the available wind resource
characteristics. Incremental costs associated with labor rates, material costs, logistical or siting
challenges, and distance to existing transmission infrastructure also contribute to regional
differences. This range of costs is illustrated in the supply curve (Figure 5), wherein the cluster
of installed wind projects in 2018 is toward the lower LCOE end of the supply curve and reflects
projects built in the interior region of the United States where the wind resource is favorable. On
the other side of the spectrum, the higher LCOE values on the supply curve reflect sites with a
relatively lower-quality wind resource and may occur in many regions of the country depending
on local meteorological and terrain features.
16
Figure 5. National land-based-wind resource supply curve with 2018 U.S. installed projects
4.9 Land-Based-Wind Discussion of Results in Context of DOE Goals

In this section, we present the official land-based-wind GPRA levelized cost of energy end-point
target in 2030. The GPRA trajectory starts at $56/MWh (in 2015 USD) in 2016, which was
baselined in 2015, and is projected to the $23/MWh (in 2015 USD) target in 2030. The 2030
target is derived from the analysis conducted in “Enabling the SMART Wind Power Plant of the
Future Through Science-Based Innovation” (Dykes et al. 2017) study. The pathway for LCOE
reduction from the 2015 baseline to the 2030 target is primarily driven by the increase in AEP
through turbine scaling, enhanced control strategies, and reducing wind plant losses ($20/MWh
[in 2015 USD]). The secondary driver in decreasing LCOE is through reductions in CapEx from
wind power plant economies of scale, turbine scaling, and efficient manufacturing capabilities
($8/MWh [in 2015 USD]). The remaining LCOE reductions are derived from decreasing OpEx
through advanced O&M strategies ($4/MWh [in 2015 USD]) and lowering the cost of capital
from increased certainty of future plant performance and reduced risk ($1/MWh [in 2015 USD]).
This LCOE reduction pathway is illustrated in Figure 6.
17
Figure 6. Pathway to LCOE reduction in 2030 by LCOE parameter
The GPRA trajectory and 2030 target are shown in Figure 7. To track LCOE progress against the
GPRA trajectory, the historical LCOE (starting from the baseline year) and the current LCOE
value assessed in this year’s report are plotted. The GPRA baseline and target levelized cost of
energy are reported in 2015 USD for land-based wind because WETO will report land-based
wind values in 2015 USD. The current and historical LCOE values are labeled as “Actuals” in
Figure 7.
18
60
56 GPRA Trajectory
50 Actuals
52
48
LCOE (2015$/MWh)
40
40
30
23
20
10
0
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Figure 7. Land-based wind GPRA cost trajectories for LCOE (in 2015 USD)
Note: The dramatic drop in LCOE between 2018 and 2019 is due largely in part to updates made to the financing assumptions. In
previous years, WETO reported land-based financing using a constant and conservative FCR. The land-based FCR was updated
in 2019 reporting to maintain reporting consistency between land-based wind and offshore wind. Land-based-wind cost of capital
data collected by Lawrence Berkeley National Laboratory (Wiser and Bolinger 2019) gives a basis for WACC assumptions for
the representative wind project in 2018 and results in a nominal WACC of 7.59%.
19
5 Offshore Wind
This section explains the methodology and assumptions of calculating LCOE for U.S. offshore
wind with each subsection detailing the data and assumptions used. The data from this analysis
are derived from NREL’s internal offshore wind database, which is populated by global market
data and used to analyze market trends for offshore wind costs in Europe to determine cost
projections for the United States and inform internal NREL modeling. The analysis uses data and
information from the “2018 Offshore Wind Technologies Market Report” (Musial et al. 2019)
and NREL’s 2019 ATB (NREL’s Annual Technology Baseline and Standard Scenarios web
page: atb.nrel.gov) for offshore wind. In this report, we update costs and financial parameters to
conform with the most recent industry and market developments. Additionally, we introduce new
reference sites to reflect site conditions that are representative of near- to medium-term U.S.
project development. Additional details are provided in Section 5.1 and Appendix D.
5.1 Offshore Reference Project

For the purposes of this study, offshore wind is broken into two technology categories: fixed-
bottom wind, and floating wind. The two substructure technologies are used in different site
conditions; hence, this analysis considers two separate offshore reference sites (one for fixed
bottom and one for floating). The two refence sites are used to calculate LCOE for each of the
technologies; however, the fixed-bottom site is used for GPRA reporting.
We assessed a reference project at the fixed-bottom and floating sites, which each comprise 109
wind turbines rated at 5.5 MWthe turbine capacity reported in Musial et al. (2019) in 2018 (a
total wind power plant capacity of 600 MW). The turbines are oriented in a grid layout and are
expected to operate for 25 years without any catastrophic O&M events. Turbines at the fixed-
bottom reference site are assumed to be supported by a monopile substructure 50 km from cable
landfall at a water depth of 34 m, which is similar to the characteristics of the wind energy areas
located in the North Atlantic region. At the floating reference site, the turbines are assumed to be
held by a semisubmersible substructure 36 km from cable landfall at a water depth of 739 m,
which is analogous to features of the Pacific Coast. Additional information on the types of fixed-
bottom and floating wind substructures can be found in Musial et al. (2017).
The array cable system and electrical line that connects to the offshore substation is a 33-kilovolt
collection system design. The export cable from the offshore substation that is used to transfer
the power to landfall assumes a 220-kilovolt export system. Specific to the floating reference
site, cost premiums are applied to the array and export cable systems to account for the use of
dynamic cables. A summary of the two offshore reference site characteristics is provided in
Table 12. Further details on the development of the fixed-bottom and floating reference sites are
presented in Appendix D.
20
Table 12. Offshore Reference Project Parameters (Fixed-Bottom and Floating Substructures)
Project Parameters
Fixed Bottom Floating
Region North Atlantic Pacific Coast
Turbine rated power (MW) 5.5 5.5
Number of turbines 109 109
Wind plant capacity (MW) 600 600
Water depth (m) 34 739
Substructure type Monopile Semisubmersible
Distance from shore (km) 50 36
Project design life (yr) 25 25
5.2 Offshore Capital Expenditures

Given the relatively limited number of offshore wind projects in the United States and the lack of
publicly available data, we obtained the CapEx estimates using ORCA (Beiter et al. 2016). The
representative turbine characteristics (i.e., turbine capacity, rotor diameter, and hub height) used
as inputs to the model were obtained from the “2018 Offshore Wind Technologies Market
Report” (Musial et al. 2019). The capacity-weighted average turbine installed globally in 2018
was 5.5 MW with a 140-m rotor diameter at a 94-m hub height. We used these turbine
parameters in combination with the spatial parameters presented in Table 12 for the fixed-bottom
and floating reference sites to calculate CapEx.
The ORCA model yields a total installed CapEx value of $4,444/kW for the fixed-bottom
reference site and $5,355/kW for the floating reference site. It should be noted that the CapEx
estimates for floating offshore wind in this analysis assume a 5.5-MW turbine and are not
necessarily optimized for floating offshore wind applications, therefore, they may negatively
impact CapEx estimates. Progression to larger turbines is likely to coincide with deployment of
commercial-scale floating wind technologies (Spyroudi 2016).
A breakdown of the CapEx for the fixed-bottom offshore reference project is shown in Figure 8.
The shades of green represent the turbine cost, shades of blue represent BOS costs, and shades of
purple represent financial costs. Further details on the BOS cost breakdown are provided in
Maness et al. (2016). The dollar-value component cost breakdown is shown in Table 13. Figure 9
and Table 14 describe the same breakdown for the floating offshore reference project.
21
Figure 8. Capital expenditures for the fixed-bottom offshore wind reference project
22
Table 13. Fixed-Bottom Offshore CapEx and LCOE Breakdown

($/kW) ($/MWh)
TURBINE CAPITAL COST 1,301 17.2

Substructure and foundation 676 8.9
Port and staging, logistics, transportation 58 0.8
Electrical infrastructure 1,130 14.9
Lease price 88 1.2
BALANCE OF SYSTEM 2,498 33.0
Insurance during construction 44 0.6
Decommissioning bond 58 0.8
Construction financing 183 2.4
Contingency 316 4.2
Plant commissioning 44 0.6
SOFT COSTS 645 8.5
TOTAL CAPITAL EXPENDITURES 4,444 58.8
Note: The electrical infrastructure cost category includes construction and fabrication costs of both the land-based
and offshore substations, and does not include installation costs for the electrical system, as they are included in the
assembly and installation costs.
23
Figure 9. Capital expenditures for the floating offshore wind reference project
24
Table 14. Floating Offshore CapEx and LCOE Breakdown

($/kW) ($/MWh)
TURBINE CAPITAL COST 1,301 22.0

Substructure and foundation 1,443 24.4
Port and staging, logistics, transportation 44 0.7
Electrical infrastructure 999 16.9
Lease price 88 1.5
BALANCE OF SYSTEM 3,263 55.3
Insurance during construction 52 0.9
Decommissioning bond 76 1.3
Construction financing 221 3.7
Contingency 389 6.6
Plant commissioning 52 0.9
SOFT COSTS 790 13.4
TOTAL CAPITAL EXPENDITURES 5,355 90.7
Notes:
• The electrical infrastructure cost category includes construction and fabrication costs of both the land-based and
offshore substations; this category does not include installation costs for the electrical system, as they are
included in the assembly and installation costs.
• Take caution should if comparing fixed-bottom and floating offshore wind project costs because there are
significant differences in spatial parameters between the representative sites selected for each technology.
There is a notable difference between the cost components that make up the land-based and
offshore projects. In the land-based project, 69% of the cost is related to the wind turbine. For the
offshore project, the turbine makes up 29% of the fixed-bottom offshore and 24% of the floating
offshore reference project costs. The substructure and foundation portion of the BOS costs is the
primary cause for the cost differences between the fixed-bottom and floating offshore projects.
The analysis indicates that the fixed-bottom substructure is about 47% of the cost of the floating
substructure (assuming a monopile for fixed bottom and a semisubmersible for floating). The
other differences in the BOS and financial costs are related to the empirically-based cost and
scaling relationships—some of which are a calculated as a percentage of total costs.
25
5.3 Offshore Technology Characteristics and Annual Energy
Production
Offshore wind turbines are continuing their upscaling trend. Looking ahead, turbines installed
are expected to exceed 10 MW, as turbine manufacturers are announcing 12-MW turbines ready
to be shipped in 2021 (GE Renewable Energy 2018). Some offshore wind developers are
anticipating 13- to 15-MW turbines to be on the market by 2024 (DONG Energy 2017). Larger
turbine sizes are enabled in offshore applications, in part, because there are fewer transportation
and installation limits than for land-based projects. Furthermore, incorporating larger turbines in
a project’s design may also reduce the balance-of-plant costs and result in fewer turbines to
service (Musial et al. 2017).
5.3.1 Turbine Parameters

The offshore wind turbine technology characteristics for this analysis are calculated using a
capacity-weighted average of the global offshore wind projects installed in 2018. The results of
this calculation yield a turbine rating of 5.5 MW, rotor diameter of 140.4 m, and a hub height of
93.8 m, as reported in Musial et al. (2019). These values and additional assumptions for the
offshore turbine characteristics are summarized in Table 15.
Table 15. Reference Offshore Turbine Parameter Input Assumptions

Turbine Parameters
Turbine rotor diameter (m) 140.4
Turbine hub height (m) 93.8
Drivetrain design Geared
Cut-in wind speed (m/s) 3
Cut-out wind speed (m/s) 25
5.3.2 Wind Resource

In this report, we conducted an analysis assessing the wind resource for the fixed-bottom and
floating reference sites in the North Atlantic and Pacific Coast, respectively. The details of this
analysis and its results are presented in Appendix D. We calculated the annual average wind
speed in the North Atlantic to be 8.43 m/s at 50 m (8.97 m/s at 93.8 m), and 7.67 m/s at 50 m
(8.17 m/s at 93.8 m) for the Pacific Coast. The wind resource parameters are summarized in
Table 16.
26
Table 16. Reference Offshore Wind Resource Input Assumptions
Wind Resource Characteristics
North Atlantic Pacific Coast
Annual average wind speed at a 50-m height (m/s) 8.43 7.67
Annual average wind speed at a 93.8-m hub height (m/s) 8.97 8.17
Weibull k 2.1 2.1
Shear exponent 0.1 0.1
5.3.3 Losses and Availability

The U.S. offshore reference project considers losses from wind power plant array wake impacts,
inefficiencies in power collection and transmission, and losses from wind power plant
availability. These losses and availability estimates are determined using ORCA (Beiter et al.
2016), which performs calculations based on a specific wind power plant layout and site-specific
meteorological ocean conditions. The total system losses for the fixed-bottom technology in the
North Atlantic are 16.2%, whereas the system losses for the floating offshore technology in the
Pacific Coast region are 21.0%. The primary differences in loss between these offshore
technologies are the additional electrical losses for floating wind in deeper waters (i.e., 34 m
versus 739 m), and wake losses from the different reference sites. Table 17 summarizes the
losses and availability estimates for the fixed-bottom and floating offshore wind technologies.
Table 17. Reference Offshore Wind Total Losses

Losses
(Fixed Bottom) (Floating)
Total system losses (%) 16.2% 21.0%
5.3.4 Annual Energy Production

The net AEP is calculated using the turbine technology parameters and wind resource inputs, and
by applying the appropriate losses and availability estimates. The net AEP is calculated for the
offshore reference project for both fixed-bottom and floating offshore applications using ORCA.
The resulting net AEP for the fixed-bottom configuration in the North Atlantic is 4,257
MWh/MW/year, with a 48.6% net capacity factor, and 3,324 MWh/MW/year for the floating
configuration in the Pacific Coast region, with a 37.9% net capacity factor. These values are
summarized in Table 18.
Table 18. Reference Offshore Wind Net Annual Energy Production
Net Annual Energy Production
Net energy capture (MWh/MW/year) 4,257 3,324
Net capacity factor (%) 48.6% 37.9%
Capacity factors in the United States are expected to vary widely depending on the project
location and turbine technology. Improving the performance of offshore wind turbines and arrays
27
has been a continued focus of industry and research activities. More information on the global
trends for offshore wind power plant performance can be found in Musial et al. (2017).
5.4 Offshore Operation and Maintenance Expenditures

OpEx can vary greatly between projects for a number of reasons; however, the two largest cost
drivers are the distance from the project to the maintenance facilities and the meteorological
ocean climate at the site (Maples et al. 2013; Pietermen et al. 2011). Beiter et al. (2016)
evaluated the O&M for fixed-bottom and floating substructures located at sites with various
wave heights, water depths, and distances from ports informed by parametric studies using the
Energy Research Centre of the Netherlands O&M Tool. 17 The North Atlantic fixed-bottom and
Pacific Coast floating offshore reference projects assume the same operational costs (e.g., annual
leases and fees) of $30/kW/yr, whereas the maintenance expenditures differ between the two
because they each use a different maintenance strategy (i.e., in situ versus tow to shore) and have
distinctive site characteristics (i.e., distance from operations port, meteorological ocean
conditions, and water depth), resulting in $129/kW/yr for the fixed-bottom project and
$137/kW/yr for the floating project. These O&M costs and the LCOE component breakdown are
shown in Table 19.
Table 19. Offshore Wind Reference Project OpEx

($/kilowatt-
($/kW/yr) ($/kW/yr) ($/kWh)
hour [kWh])
Operation 30 7.1 30 9.1
Maintenance 99 23.2 107 32.1
OpEx 129 30.3 137 41.2
5.5 Offshore Finance

This section describes the financing assumptions for the report’s representative offshore wind
(both fixed bottom and floating) reference projects in the United States in 2018. The offshore
financing assumptions are primarily informed by the work done in NREL’s 2019 ATB.
5.5.1 Discount Rate

Although it is evident that an individual project’s financing terms will reflect its specific risk
profile, new assumptions and ranges of nominal discount rates for offshore wind have been
developed that are based largely on observations from the recent European market, assessing
theoretical commercial wind projects in the United States, and NREL’s 2019 ATB. For this
analysis, we assume the discount rate and other economic evaluation metrics to be similar for the
North Atlantic and Pacific Coast representative projects. The updated nominal WACC for 2018
is 5%, which corresponds to a real WACC of 2.4%, assuming a 2.5% inflation rate. Underlying
assumptions for marginal tax rate and inflation are consistent with those presented in Section
4.5.1.
17
Operation and maintenance costs for offshore wind projects are assumed to include labor, vessels, equipment,
scheduled maintenance, unscheduled maintenance, land-based support, and administration.
28
5.5.2 Economic Evaluation Metrics
To determine the LCOE for the 2018 representative offshore wind projects, a similar FCR
methodology that was used for the land-based representative wind project is applied (see Section
4.5) and informed by the 2019 ATB. The FCR includes the present value of the accumulated
depreciation benefit and ignores bonus depreciation. Assuming a project life of 25 years and
discount rates and depreciation benefits as calculated, the offshore reference project nominal and
real FCR for fixed-bottom and floating technologies is 7.4% and 5.6%, respectively. Table 20
presents a summary of nominal and real WACC, CRF, and FCR that is used throughout the
offshore analysis.
Table 20. Summary of Offshore Reference Project Economic Evaluation Metrics

North Atlantic and Pacific Coast
(Fixed Bottom and Floating)
Nominal Real
WACC (%) 5.0% 2.4%
CRF (%) 7.1% 5.4%
FCR (%) 7.4% 5.6%
5.6 Offshore Reference Project Levelized Cost of Energy

Based on the offshore turbine technology parameters, site conditions, wind resource, and cost
estimates, the CapEx, FCR, OpEx, and AEP are plugged into the LCOE equation and the LCOE
is computed to estimate a 2018 offshore reference wind power plant for fixed-bottom and
floating technologies. LCOE for the North Atlantic representative project is calculated at
$89/MWh and $132/MWh for the representative project on the Pacific Coast. Table 21
summarizes the fixed-bottom costs for the primary components (including their contribution to
LCOE) in the North Atlantic. The graphic in Figure 10 illustrates the LCOE breakdown for the
primary components of the North Atlantic wind plant, whereas Figure 11 provides a graphical
representation of LCOE by line item. Table 22, Figure 12, and Figure 13 show the cost values,
LCOE breakdown, and the LCOE values for the floating project in the Pacific Coast region.
Table 21. Fixed-Bottom Offshore Wind LCOE and Reference Projects Cost Breakdown

($/kW) ($/MWh)
CapEx 4,444 58.8
OpEx ($/kW/yr) 129 30.3

29
Figure 10. Component-level LCOE contribution for the 2018 fixed-bottom offshore wind reference
project
30
Figure 11. Component-level cost breakdown for the 2018 fixed-bottom offshore wind reference
project
Table 22. Floating Offshore Wind LCOE and Reference Projects Cost Breakdown

($/kW) ($/MWh)
CapEx 5,355 90.7
OpEx ($/kW/yr) 137 41.2

31
Figure 12. Component-level LCOE contribution for the 2018 floating offshore wind reference
project
Figure 13. Component-level cost breakdown for the 2018 floating offshore wind reference project
5.7 Offshore Levelized Cost of Energy Sensitivities

The LCOE parameters described earlier in this report represent the fixed-bottom and floating
offshore reference wind projects; however, input parameters for a near-term wind project are
subject to considerable uncertainty. Hence, it is beneficial to investigate how this variability may
32
impact the LCOE. The sensitivity analysis shown in Figure 14 (for the North Atlantic fixed-
bottom site) and Figure 15 (for the Pacific Coast floating site) focuses on the basic LCOE inputs:
CapEx, OpEx, net capacity factor, and FCR, which are broken into two principal
elementsdiscount rate and economic operational lifetime. We determined the sensitivity ranges
for the LCOE inputs by examining the globally installed offshore projects in 2018 reported in
Musial et al. (2019) and NREL’s offshore wind database.
Figure 14. Sensitivity of fixed-bottom offshore wind LCOE to key input parameters
Figure 15. Sensitivity of floating offshore wind LCOE to key input parameters
Note: The reference LCOE reflects a representative industry LCOE. Changes in LCOE for a single variable can be
understood by moving to the left or right along a specific variable. Values on the x-axis indicate how the LCOE
will change as a given variable is altered and all others are assumed constant (i.e., remain reflective of the
reference project).
33
Sensitivity analyses are conducted by holding all reference project assumptions constant and
altering only the variable in question. Sensitivity ranges are selected to represent the highs and
lows observed in the industry and from the data in Musial et al. (2019). This selection of ranges
provides insight into how real-world ranges influence LCOE. Keeping the same 600-MW project
size, the sensitivity analysis yields ranges in LCOE from a low of $63/MWh to a high of
$124/MWh for fixed-bottom configurations (Figure 14), and a low of $83/MWh to a high of
$176/MWh for floating configurations (Figure 15). Within the ranges shown, CapEx and project
design life are the two factors that are shown to have the greatest impact on offshore wind
LCOE, with CapEx having the greatest influence on decreasing LCOE relative to the reference
projects.
5.8 Offshore Supply Curve

Nearly 2,060 GW of offshore wind technical resource potential is estimated by Musial et al.
(2016) for all major U.S. coastal regions (excluding Alaska and Hawaii). 18 The LCOE for each
of the potential wind power plant locations is computed using a site-specific CapEx and net AEP
using a geographic-information-system-based algorithm that is used in Beiter et al. (2017).
LCOE, which includes the cost of transmission and was calculated for this theoretical capacity,
ranged from just below $70/MWh to $235/MWh. Figure 16 illustrates the supply curve of the
gross offshore wind resource potential and highlights the 2018 fixed-bottom (marked with a blue
marker) and floating (marked with an orange marker) offshore reference sites, using an updated
version of ORCA (Beiter et al. 2016) and the representative offshore sites and wind
characteristics presented in Section 5.3.
Note that the potential wind power plant capacity available over a range of LCOE varies by
offshore geographic region primarily because of the available wind resource, distance from
port, and water depth. Incremental costs associated with labor rates, material costs, logistical or
siting challenges, and distance to existing transmission infrastructure also contribute to
regional differences.
18
The offshore wind technical resource potential does not consider exclusion areas (e.g., conflicting use areas).
34
Figure 16. National fixed-bottom and floating offshore wind supply curve
5.9 Offshore Discussion of Results in Context of DOE Goals

In this section, we present the official fixed-bottom offshore wind GPRA levelized cost of
energy 2030 target, which has been rebaselined in this report. The 2030 target analysis estimates
the future CapEx and O&M costs using ORCA (Beiter et al. 2016) and assuming a wind power
plant comprising 15-MW turbines placed in the North Atlantic reference site. The cost reduction
trajectory is also informed by technology innovations considered in the spatial economic analysis
by Beiter et al. (2016). This assessment estimates the wind plant’s CapEx to be $3,476/kW, with
an O&M cost of $60/kW/yr operating at a 58% net capacity factor. The future financial
assumptions are informed by NREL’s 2019 ATB, with an operation life of 25 years for a 5.7%
real FCR. The 2030 LCOE calculated from this analysis is $51/MWh and is designated as the
2030 GPRA target. The GRPA targets for 2019 through 2030 are shown in Figure 17. The
reported LCOE value for 2019 is calculated in this report (Section 5.6) and labeled as
“Historically Reported Data” in Figure 17.
35
Figure 17. Fixed-bottom wind GPRA cost trajectories for LCOE
The reduction in the estimated LCOE (“GPRA goal”) between 2019 and 2030 is categorized into
various cost components: O&M expenditures ($17/MWh), CapEx components (i.e., turbine,
electric system, and support structure; $12/MWh), and improvements in AEP ($9/MWh). These
categories and their respective cost reductions are shown in Figure 18.
Figure 18. Fixed-bottom cost reductions in GPRA cost trajectories for LCOE
36
6 Conclusions and Future Work
This analysis presents a picture of the levelized cost of land-based and offshore wind energy
using empirically-derived and modeled data representative of 2018 market conditions. Scenario
planning and modeling activities often focus on one number (or cost) for land-based LCOE and
one for offshore LCOE. In reality, the cost of land-based wind energy varies greatly across the
United States and offshore wind LCOE varies significantly across Europe and Asia (Table 23).
Notably, the LCOE analysis presented in this report is only one way to measure the cost of wind
energy. It does not include other costs and price issues that influence a given wind project’s
viability, such as transmission, environmental impacts, military constraints, or other areas of
consideration (e.g., public policy, consumer costs, energy prices, or public acceptance). In
addition, these LCOE estimates do not reflect the value of electricity, incentives, or other policy
mechanisms (such as production tax credits or investment tax credits) that affect the sales price
of electricity produced from wind projects.
Table 23. Range of LCOE for U.S. Land-Based and Offshore Wind in 2018
Land-Based Wind Projects Offshore Wind Projects

Low High Low High
CapEx ($/kW) 1,000 5,000 2,470 6,500
OpEx ($/kW/yr) 33 59 65 194
Net capacity factor (%) 20% 52% 35% 50%
Discount rate (nominal) [%] 6.4% 8.1% 3.8% 6.3%
Operational life (years) 15 35 15 35
LCOE ($/MWh) 33 115 83 176
The analysis and findings in this report helped generate the following conclusions:
• LCOE estimates continue to show a downward trend from the 2010 Cost of Wind Energy
Review (Tegen et al. 2012) to 2017. Land-based and offshore technologies have shown
similar cost reduction trends.
• The reference project LCOE for land-based installations are observed to be $42/MWh;
the full range of single-variable, land-based sensitivity estimates covers $33–$115/MWh.
• The reference offshore LCOE project estimates are $89/MWh for fixed-bottom
substructures and $132/MWh for floating substructures, with a single-variable sensitivity
range of $83–$176/MWh. This range is mostly influenced by the large variation in
CapEx ($2,470–$6,500/kW) reported by project developers and is in part a function of
differences in water depth and distance to shore. Offshore wind cost reductions show a
steep reduction through 2018 and are showing alignment more with recent European
project bids or “strike prices” and might suggest continued significant reductions in the
coming years.
• The sensitivity analysis shows that LCOE can vary widely based on changes in any one
of several key factors. The largest effect on LCOE for land-based wind is CapEx
37
followed by net capacity factor, then project design life. The largest effect on LCOE for
fixed-bottom and floating offshore wind is CapEx followed by project design life, then
net capacity factor.
• The range of LCOE calculated for the more than 10,000 GW of theoretical land-based
wind capacity ranges from $31/MWh to beyond $200/MWh, with an estimated LCOE
range of $37–$86/MWh for the projects installed in 2018. For fixed-bottom and floating
offshore wind technology, an LCOE range between $67/MWh and $233/MWh is
estimated for approximately 5,430 GW of theoretical capacity for all major U.S. coastal
regions (excluding Alaska and Hawaii). The fixed-bottom representative offshore site is
on the lower end of this range at $89/MWh, whereas the floating representative site is
near the middle of the range at $132/MWh.
• The 2019 GPRA target for land-based wind is $49/MWh compared to the actual LCOE
estimate of $40/MWh in 2015 USD. 19 For fixed-bottom offshore wind, the GPRA target
for 2019 is $161/MWh compared to the actual LCOE estimate of $89/MWh in 2018
USD.
NREL continues to work to gain a better understanding of costs associated with many
components of wind turbines and their related systems. Ongoing collaboration with industry,
growing data sets, and enhanced modeling capabilities are expected to continue to lead to better
insights and increased awareness of current and future wind power system and component costs.
Future updates to this report are anticipated to help maintain a perspective on costs that is
grounded in real-time market changes and to offer greater insight into the costs and performance
of individual components related to the wind electric generation system. In addition, these
reports are intended to provide greater clarity regarding wind energy costs and the effects of
changes in specific variables on LCOE. The data and tools developed from this work will be
used to help inform projections, goals, and improvement opportunities. As the industry evolves
and matures, these data provide current representative project costs and LCOE estimates for
scenario planning, modeling, and goal setting.
Future work entails three primary objectives: (1) continuing to enhance data representing market-
based costs, performance, and technology trends to reflect actual wind industry experience, (2)
enhancing the fidelity of bottom-up cost and performance estimation for individual wind plant
components, and (3) understanding sensitivities to factors, such as regional differences, site
characteristics, and technology choices. In 2020 and beyond, NREL will continue to work with
industry and national laboratory partners to obtain project-specific data to validate and improve
models.
19
The 2019 GPRA target and actual levelized cost of energy values for land-based wind are reported in 2015 USD
because WETO will report land-based wind values in 2015 USD.
38
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42
Appendix A. Land-Based Wind 30-Year Financial Life
Sensitivity
The financial life is the period in which a project achieves the requisite cash flow it needs to
recover its initial capital expenditures (CapEx) and meet investors’ internal rate of return
threshold. In basic levelized cost of energy (LCOE) analysis, this is the period in which capital is
recovered at a specified rate of return, with a composite implied internal rate of return threshold
based on the project’s weighted-average cost of capital. In this report, the 25-year financial life
assumption for the LCOE calculation was derived from the period associated with engineering
certification processes and procedures. This appendix includes a calculation of the sensitivity of
a longer land-based wind power plant financial life of 30 years and reports its impact on the cost
of energy. We consider this extended financial life based on data from direct engagements with
wind power plant owners. For this sensitivity analysis, we change the plant’s financial life from
25 to 30 years. All other wind power plant assumptions (i.e., CapEx, operational expenditures,
and net annual energy production remain the same as the analysis provided in the main body of
this report. 20 A summary of the financial parameters impacted by increasing the plant life to 30
years (i.e., capital recovery factor, fixed charge rate, and LCOE) are shown in Table A1.
Table A1. Summary of Land-Based Capital Recovery Factor, Fixed Charge Rate, and Levelized
Cost of Energy for a 30-Year Useful Life
Nominal Real
Capital recovery factor (%) 8.5% 6.5%
Fixed charge rate (%) 9.1% 6.9%
TOTAL LCOE ($/megawatt-
40
hour [MWh])
Based on this sensitivity analysis, extending the plant’s financial life and assumed period in
which the threshold internal rate of return is achieved from 25 to 30 years results in a reduction
of LCOE of approximately 4.8%—a decrease from $42/MWh to $40/MWh.
This sensitivity analysis only considers the extension of the financial life of the wind plant from 25 to 30 years,
20
whereas extension of plant life will have impacts on a project’s CapEx and OpEx.
43
Appendix B. Offshore Wind 30-Year Financial
Life Sensitivity
The authors performed the same financial life sensitivity analysis conducted for land-based wind
in Appendix A for fixed-bottom and floating offshore wind. The analysis in this report considers
a 25-year financial life derived from the period associated with engineering certification
processes and procedures. This appendix includes a calculation of the sensitivity of a longer
offshore wind power plant financial life of 30 years for fixed-bottom and floating wind facilities
and reports its impact on the cost of energy. We consider this extended financial life based on
data from direct engagements with wind power plant owners and analysis of the European
offshore wind power plant lifetime. For this sensitivity analysis, we change the plant’s financial
life from 25 to 30 years. All other wind power plant assumptions (i.e., capital expenditures,
operational expenditures, and net annual energy production) remain the same as the analysis
provided in the main body of this report. 21 A summary of the financial parameters impacted by
increasing the plant life to 30 years (i.e., capital recovery factor, fixed charge rate, and levelized
cost of energy [LCOE]) are shown in Table B1.
Table B1. Summary of Offshore Capital Recovery Factor, Fixed Charge Rate, and Levelized Cost
of Energy for a 30-Year Useful Life
Nominal Real Nominal Real
Capital recovery factor (%) 6.5% 4.7% 6.5% 4.7%
Fixed charge rate (%) 6.8% 4.9% 6.8% 4.9%
TOTAL LCOE
82 121
($/megawatt-hour [MWh])
Based on this sensitivity analysis, extending the plant’s financial life and assumed period in
which the threshold internal rate of return is achieved from 25 to 30 years results in reduced
LCOE for the North Atlantic and Pacific Coast reference projects. Fixed-bottom projects may
experience about an 8% reduction in LCOE from $89/MWh to $82/MWh. Floating offshore
projects may experience about a 8.3% reduction in LCOE, or a decrease from $132/MWh to
$121/MWh assuming a 30-year life.
This sensitivity analysis only considers the extension of the financial life of the wind plant from 25 to 30 years,
21
whereas extension of plant life will have impacts on a project’s capital and operational expenditures.
44
Appendix C. Land-Based Wind 2030 Turbine
Technology Assessment
Since the release of the “Wind Vision” report (U.S. Department of Energy 2015) and “Enabling
the SMART Wind Power Plant of the Future Through Science-Based Innovation” (Dykes et al.
2017), the wind industry’s original equipment manufacturer and stakeholder community have
frequently commented on the cost reductions presented in past releases of National Renewable
Energy Laboratory’s (NREL’s) ATB (Annual Technology Baseline and Standard Scenarios web
page: atb.nrel.gov) as being too conservative. Industry experts now anticipate wind energy
LCOE of 2-2.5 cent/kilowatt-hour by the mid-2020s. Given this expert input, NREL has
executed a bottom-up engineering analysis to estimate the future cost of wind energy.
The first step to the bottom-up analysis was to define a representative future turbine technology
in 2030. The primary turbine technology characteristics considered include the turbine’s
nameplate rating, rotor diameter, and hub height. To define these 2030 characteristics, analysts
used a combination of projected historical data (Wiser and Bolinger 2019) and future technology
predictions from published literature (Shreve 2018). The outcome of this exercise projected the
future turbine’s rated power to be 4.5 megawatts (MW), with a rotor diameter of 167 meters (m)
and a hub height of 110 m. These characteristics are considered to be the median-innovation
scenario and are summarized in Table C1.
As part of the analysis, a range of future turbine technology was considered and used to inform
the 2019 ATB (Annual Technology Baseline and Standard Scenarios web page: atb.nrel.gov).
Analysts determined a range of future wind turbine technologies for two additional turbine
technology pathways in 2030: a high-innovation scenario, in which breakthrough science-based
innovations increase net energy production and turbine scaling enable system cost reductions,
and a low-innovation scenario, which included little change from the turbine technology of
today. The high-innovation scenario introduces a higher-capacity 6-MW turbine with a 234-m
rotor diameter on a 160-m tower. The low-innovation scenario relies on a turbine that is
commercially available today (i.e., a 4-MW rating with a 156-m rotor diameter on a 110-m
tower. The high- and low-innovation turbine characteristics are also presented in Table C1.
Table C1. Summary of Projected Technology Characteristics for the 2030 Representative Turbines
High Innovation Median Innovation Low Innovation
Parameter
10%−35% Probability 35%−65% Probability 65%−90% Probability
Turbine rating (MW) 6 4.5 4
Hub height (m) 160 110 110
Rotor diameter (m) 234 167 156
Specific power (watts/m2) 140 205 209
Now with the 2030 technologies defined, analysts are able to perform the bottom-up cost
modeling and wind plant performance analysis to estimate LCOE. The capital expenditure
(CapEx) cost estimates were performed using NREL’s 2015 Cost and Scaling Model and Land-
Based-Wind Balance of System (BOS) model. Where applicable, analysts applied cost
adjustments to the modeled cost results to account for factors such as additional transportation
45
costs for longer blades or additional tower material. This cost adjustment technique was applied
to the three scenarios (i.e., low, median, and high innovation) based on the turbine-specific
characteristics for each scenario. The cost adjustments were informed by current work on the Big
Adaptive Rotors project (Johnson et al. 2019) and taller towers analysis (Lantz et al. 2019).
In all cases, the turbine’s CapEx contributes the most to the total CapEx. The roughly 34%
difference in CapEx between the high- and low-innovation scenarios is an artifact of assuming
innovations that enable the manufacturing, transportation, and installation of larger turbines (i.e.,
6 MW in the high-innovation scenario and 4 MW in the low-innovation scenario). The cost
estimates for BOS assumes a fixed wind power plant size of 200 MW for all scenarios. A
reduced number of turbines in the wind plant for the larger turbine ratings brings down the BOS
costs; however, this is partially offset by the additional transportation and installation cost of the
larger turbines. This is apparent in the high- and median-innovation scenarios, wherein the BOS
costs for the median scenario is about 4.4% lower than the high-scenario case. The soft costs in
the analysis were assumed to be 3% of the total turbine and BOS costs for all cases to account
for construction finance and contingency. The summary of modeled CapEx estimates for the
2030 representative wind plants are shown in Table C2 and are used to inform the scenarios in
the 2019 ATB (Annual Technology Baseline and Standard Scenarios web page: atb.nrel.gov).
Table C2. Summary of Modeled Capital Costs for the 2030 Representative Wind Plants
Cost Category
Turbine ($/kW) 795 929 1,065
BOS ($/kW) 272 260 289
Soft Cost ($/kW) 33 36 40
Total ($/kW) 1,100 1,225 1,394
Historical cost data are sometimes used to estimate learning rates, which trace the relationship
between the cost of wind, for example, and cumulative installed wind capacity. These historical
learning rates are then commonly extrapolated to forecast possible future costs. Since operation
and maintenance (O&M) market data are not widely available this methodology, which is
presented in Wiser et al. (2019), was used to inform the O&M estimates in 2030. The future
average OpEx for the median-innovation scenario is estimated to be $39.0/kW/yr with a range of
$43.6/kW/yr for the low-innovation scenario and $34.3/kW/yr for the high-innovations scenario.
A summary of the 2030 land-based wind OpEx estimates for each of the scenarios is presented in
Table C3.
Table C3. Summary of Assumed Operation and Maintenance Costs for the 2030 Representative
Wind Plants
Cost Category
OpEx ($/kW/year) 34.3 39.0 43.6
46
The 2030 wind plant performance values were calculated using NREL’s SAM (NREL’s System
Advisor Model web page: https://sam.nrel.gov/). The model estimated the representative wind
plant’s capacity factors assuming an idealized power curve generated from the turbine
characteristics (i.e., turbine rating and rotor diameter) defined for the low, median, and high
scenarios. Additional reductions in wind plant losses (e.g., reduced wake losses) from Dykes et
al. (2017) were also applied. The resulting net capacity factors, presented in Table C4, are
calculated using the representative site details shown in Table 6 in Section 4.3.2. The values
presented in Table C4 are selected from a large sample of calculated net capacity factor
scenarios. The full analysis for the 2030 representative plants includes many variations of wind
plant losses that were applied to inform the net capacity factors and used in the 2019 ATB
(Annual Technology Baseline and Standard Scenarios web page: atb.nrel.gov).
Table C4. Summary of Calculated Net Capacity Factors for the 2030 Representative Wind Plants
Parameter
Net capacity factor (%) 58.8 (assuming 7.5% losses) 48 (assuming 10% losses) 45 (assuming 15% losses)
Finally, the LCOE calculation requires financial assumptions for the low-, median-, and high-
innovation scenarios. These assumptions include financing the projects over 30 years, with a
debt share of 70% and a debt rate of 3.7%. The assumed equity return was 9%. It should be noted
that these financial assumptions are used for comparison purposes only and may not align with
the more detailed financial analysis conducted in the 2019 ATB (Annual Technology Baseline
and Standard Scenarios web page: atb.nrel.gov). Under these generic financial assumptions, the
resulting fixed charge rate and calculated LCOE for the low-, median-, and high-innovation
scenarios are summarized in Table C5.
Table C5. Summary of Assumed Fixed Charge Rate and Calculated Levelized Cost of Energy for
the 2030 Representative Wind Plants
Category Parameter 10%−35% 35%−65% 65%−90%
Probability Probability Probability
Useful life Capital recovery period (years) 30 30 30
Financing Fixed charge rate (real; after tax) [%] 4.69 4.69 4.69
LCOE LCOE (real) [$/MWh] 16.7 22.7 27.6
The land-based wind 2030 technology analysis presented in this appendix outlines one
technology pathway to achieve future cost reduction over three innovation cases. Although this
analysis presents a single technology pathway to achieve future cost reductions, there is an
unlimited number of technology pathways to achieve future cost reductions.
47
Appendix D. Offshore Wind Reference Site
Development
In this report, we introduced a new set of reference sites for fixed-bottom and floating offshore
wind technology. These reference sites are intended to reflect site conditions represent near- to
medium-term U.S. project development and based on a replicable methodology.
We conducted the following steps to identify a reference site for fixed-bottom and floating
offshore wind technology, respectively:
1. For each offshore wind region (as specified in Gilman et al. 2016), we identified a 600-
megawatt (MW) cohesive area within each Bureau of Ocean Energy Management lease
and Call Area delineation (Bureau of Ocean Energy Management 2019) that is closest to
shore (measured by direct distance), while:
o Only considering lease area(s) if at least one is available within an offshore wind
region
o Consider Call Area(s) if there is no designated lease area
o Assuming a turbine spacing of 3 MW/square kilometer (Musial et al. 2016).
2. Define “reference site” parameters by averaging key spatial parameters across the areas
defined in step #1 for each offshore wind region:
o Water depth
o Wind speed
o Gross and net capacity factor
o Array efficiency
o Distance from site to cable landfall
o Distance from cable landfall to onshore substation
o Distance from site to construction port
o Distance from site to operation & maintenance port
o Wave height.
3. Designated the “North Atlantic” offshore wind region to be the reference site for fixed-
bottom and the “Pacific Coast” to be representative for floating offshore wind
technology. This determination was made because these regions experience the highest
commercial activity for these technology types (Musial et al. 2019).
4. Specify the spatial parameters from step #2 in the Offshore Wind Cost Model to
determine LCOE.
Results for the spatial parameters calculated for each regional reference sites are shown in
Table D1.
48
Table D1. Spatial Parameters for Regional Reference Sites
Site to Distance Cable
Wind GCF (6 Array Average
Depth NCF Cable Landfall to Site to CP Site to OP
Speed MW) Efficiency HS
Landfall Substation
Units m m/s % % % km km km km m
North
34 9.03 58% 48% 92% 50 9 116 114 1.2
Atlantic
South
30 8.58 53% 44% 92% 51 7 118 118 1.2
Atlantic
Pacific
739 8.22 48% 38% 93% 36 8 189 189 2.4
Coast
Hawaii 764 8.59 52% 43% 94% 18 10 36 36 1.6
Note: The “North Atlantic” serves as fixed bottom and the “Pacific Coast” serves as the floating offshore wind technology
reference site. The “South Atlantic” and “Hawaii” are included for reference only.
Acronyms in Table D1:

GCF: gross capacity factor
NCF: net capacity factor
CP: construction port
OP: operations port
HS: significant annual average wave height
49
Appendix E. Offshore Wind Cost Model Updates
The National Renewable Energy Laboratory’s Offshore Wind Cost Model, also referred to as the
Offshore Regional Cost Analyzer (ORCA), is subject to continuous data updates and validation,
which help ensure the model reflects the latest industry and market developments. The following
key revisions to the model were implemented since the release of last year’s annual cost report:
• Several cost elements, including finance terms like total capital expenditures (CapEx) and
operational expenditures, turbine CapEx, and lease area price were validated through a
detailed analysis of the power purchase agreement between Vineyard Wind LLC and
Massachusetts electric distribution companies (Beiter et al. 2019). The agreement price
for the first commercial-scale U.S. offshore wind project suggests that the cost premium
for the “new” U.S. market is less pronounced than anticipated by many analysts.
• Turbine CapEx was reduced from previous estimates of about $1,600/kilowatt to

$1,300/kilowatt in 2018 (informed by Efstathiou [2018] and Hundleby et al. [2017])
• Export system cable costs in 2019 were reduced by 25% compared to Beiter et al. (2016)
to account for recent cost reductions resulting from low-cost material use (i.e., higher
aluminum content), lower commodity prices, and cost reductions resulting from an
antitrust case against an international cable cartel (Chee 2018).
• A lease price of $50 million, which roughly corresponds to the price paid by Equinor for
its New York lease area in 2016 (Musial et al. 2019), was included in the Offshore Wind
Cost Model. 22
• A new cost reduction trajectory from 2018 through 2032 was derived from an expert
elicitation conducted by Valpy et al. (2017) and Hundleby et al. (2017).
• Floating substructure and array cable costs were updated through industry consultation.
22
Note that in its latest auction, the Bureau of Ocean Energy Management awarded three offshore wind lease areas
off Massachusetts in December 2018 at a lease sale price record of $135 million each; more than tripling the
previous record of $42 million paid for the New York lease area sale in 2016 (Musial et al. 2019).
50
Appendix F. Summary of Assumptions for 2018
Reference Projects
Table F1. Land-Based-Wind Reference Project Levelized Cost of Energy (LCOE) Assumptions
Assumption Units Value Notes
Wind Plant Characteristics

Wind plant capacity megawatt (MW) 200
Representative of commercial-scale projects
Number of turbines 83
Turbine rating MW 2.4
“2018 Wind Technologies Market Report” (Wiser and
Rotor diameter meter (m) 115.6 Bolinger 2019)
Hub height m 88.1
watts per square
Specific power
meter (W/m2) 232 Calculation
meters per second
Cut-in wind speed
(m/s) 3 Typical turbine characteristics
Cut-out wind speed m/s 25
Annual average wind speed at
50 m m/s 7.25 Class 4 wind site
Annual average wind speed at
hub height m/s 7.86 Power law calculation
Weibull k factor 2.0
Shear exponent 0.143 Shear for neutral stability conditions
Altitude above mean sea level m 450 Altitude at turbine foundation
Losses % 15%
“Wind Vision” (U.S. Department of Energy 2015)
Availability % 98%
megawatt-hour
Net energy capture (MWh)/MW/year
(yr) 3,648 System Advisor Model calculation
Net capacity factor % 41.6%
Capital Expenditures (CapEx)
Total CapEx $/kilowatt (kW) 1,470 Bolinger 2019)
Turbine $/kW 1,011
Rotor module $/kW 293
Blades $/kW 188
Pitch assembly $/kW 61
Hub assembly $/kW 45
Nacelle module $/kW 498
2015 Cost and Scaling Model
Nacelle structural
assembly $/kW 100
Drivetrain assembly $/kW 195
Nacelle electrical
assembly $/kW 170
Yaw assembly $/kW 33
Tower module $/kW 219
51
Balance of system $/kW 332

Development cost $/kW 16
Engineering management $/kW 19
Land-based Balance of System Model (National
Foundation $/kW 60 Renewable Energy Laboratory [NREL] 2010)
Site access and staging $/kW 45
Assembly and installation $/kW 45
Electrical infrastructure $/kW 148
Soft costs $/kW 127
2019 Annual Technology Baseline (NREL’s Annual
Technology Baseline and Standard Scenarios web page:
Construction finance $/kW 39 atb.nrel.gov)
Contingency $/kW 88 6% of total CapEx
Operational Expenditures (OpEx)
Total OpEx $/kW/yr 44 (Wiser et al. 2019)
Financials
Project life for Government Performance and Reporting
Project design life years 25 Act (GPRA) reporting
Tax rate (combined state and
federal) % 26%
2019 Annual Technology Baseline (NREL’s Annual
Inflation rate % 2.5%
Technology Baseline and Standard Scenarios web page:
Interest during construction
atb.nrel.gov)
(nominal) % 4.5%
Construction finance factor % 103%
Debt fraction % 51%
Debt interest rate (nominal) % 4.5% Bolinger 2019)
Return on equity (nominal) % 12%
Weighted-average cost of
capital (WACC) (nominal;
after-tax) % 7.6%
WACC (real; after-tax) % 5.0% Calculation
Capital recovery factor
(nominal; after-tax) % 9.0%
Capital recovery factor (real;
after-tax) % 7.1%
Depreciable basis % 100% Simplified depreciation schedule
5-year
Depreciation schedule 5-year MACRS MACRS* Standard for U.S. wind projects
Depreciation adjustment (net
present value [NPV]) % 82%
Project finance factor % 106%
Calculation
Fixed charge rate (FCR)
(nominal) % 9.6%
FCR (real) % 7.5%
Levelized cost of energy $/MWh 42 Calculation
*Modified Accelerated Cost Recovery System (MACRS)
52
Table F2. Fixed-Bottom Offshore Wind Reference Project LCOE Assumptions

Wind plant capacity MW 600 Representative of commercial-scale projects
Number of turbines number 109 Calculation
“2018 Offshore Wind Technologies Market Report”
Rotor diameter m 140 (Musial et al. 2019)
Hub height m 93.8
Specific power W/m2 356 Calculation
Water depth m 34
Substructure type Monopile
Distance from shore km 50
Cut-in wind speed m/s 3
Cut-out wind speed m/s 25 Baseline site for COE Review
Average annual wind speed at 50 m m/s 8.4
Average annual wind speed at hub
height m/s 9.0
Shear exponent 0.10
Weibull k 2.1
Offshore Regional Cost Analyzer (ORCA) (based on
Total system losses
% 16.2% Beiter et al. 2016)
MWh/MW/
Gross energy capture Calculation
yr 5,081
MWh/MW/
Net energy capture
yr 4,257
Gross capacity factor % 58.0%
ORCA (based on Beiter et al. 2016)
CapEx
Total CapEx $/kW 4,444
Turbine $/kW 1,301
Rotor nacelle assembly $/kW 1,119
Tower $/kW 182
Balance of System $/kW 2,498
Development $/kW 138
Project management $/kW 70
Substructure and foundation ORCA (based on Beiter et al. 2016)
$/kW 676
Substructure $/kW 237
Foundation $/kW 439
Port and staging, logistics, and
transportation $/kW 58
Electrical infrastructure $/kW 1,130
Array cable system $/kW 383
Export cable system $/kW 580
53
Grid connection $/kW 167

Turbine installation $/kW 122
Substructure and foundation
installation $/kW 217
Soft Costs $/kW 645
Insurance during construction $/kW 44
Decommissioning bond $/kW 58
Construction finance $/kW 183
Sponsor contingency $/kW 316
Procurement contingency $/kW 199
Installation contingency $/kW 117
Project completions/ commissioning $/kW 44
OpEx
Total OpEx $/kW/yr 129
Operations (pretax) $/kW/yr 30 ORCA (based on Beiter et al. 2016)
Maintenance $/kW/yr 99
Financials
Project design life years 25 Offshore wind project life for GPRA reporting
Tax rate (combined state and federal) % 26%
Inflation rate % 2.5%
Offshore wind financing assumptions for GPRA
Debt fraction % 75% reporting
Debt interest rate (nominal) % 4.5%
Return on equity (nominal) % 10.0%
WACC (nominal; after tax) % 5.0%
WACC (real; after tax) % 2.4%
Capital recovery factor (nominal; after Calculation
tax) % 7.1%
Capital recovery factor (real; after tax) % 5.4%
5-year
Depreciation schedule MACRS Standard for U.S. wind projects
Depreciation adjustment (NPV) % 87.4%
Calculation
FCR (nominal) % 7.4%
FCR (real) % 5.6%
54
Table F3. Floating Offshore Wind Reference Project LCOE Assumptions

Wind plant capacity MW 600 Representative of commercial-scale projects
Number of turbines number 109 Calculation
“2018 Offshore Wind Technologies Market
Rotor diameter m 140 Report” (Musial et al. 2019)
Hub height m 93.8
Specific power W/m2 356 Calculation
Water depth m 739
Semisubmersi
Substructure type
ble
Distance from shore km 36
Cut-in wind speed m/s 3
Cut-out wind speed m/s 25 Baseline site for COE Review
Average annual wind speed at 50 m m/s 7.7
Average annual wind speed at hub
height m/s 8.2
Shear exponent 0.10
Weibull k 2.1
Total system losses % 21.0% ORCA (based on Beiter et al. 2016)
MWh/MW/
Gross energy capture Calculation
yr 4,205
MWh/MW/
Net energy capture
yr 3,324
Gross capacity factor % 48.0%
ORCA (based on Beiter et al. 2016)
CapEx
Total CapEx $/kW 5,355
Turbine $/kW 1,301
Rotor nacelle assembly $/kW 1,119
Tower $/kW 182
Balance of System $/kW 3,263
Development $/kW 165
Project management $/kW 85
Substructure and foundation ORCA (based on Beiter et al. 2016)
$/kW 1,443
Substructure $/kW 1,139
Foundation $/kW 304
Port and staging, logistics, and
transportation $/kW 44
Electrical infrastructure $/kW 999
Array cable system $/kW 392
Export cable system $/kW 487
55
Grid connection $/kW 120

Turbine installation $/kW 318
Substructure and foundation
installation $/kW 122
Soft Costs $/kW 790
Insurance during construction $/kW 52
Decommissioning bond $/kW 76
Construction finance $/kW 221
Sponsor contingency $/kW 389
Procurement contingency $/kW 237
Installation contingency $/kW 152
Project
completions/commissioning $/kW 52
OpEx
Total OpEx $/kW/yr 137
Operations (pretax) $/kW/yr 30 ORCA (based on Beiter et al. 2016)
Maintenance $/kW/yr 107
Financials
Project design life years 25 Offshore wind project life for GPRA reporting
Tax rate (combined state and federal) % 26%
Federal % 21%
State % 7.5%
Offshore wind financing assumptions for GPRA
Inflation rate % 2.5% reporting
Debt fraction % 75%
Debt interest rate (nominal) % 4.5%
Return on equity (nominal) % 10.0%
WACC (nominal; after tax) % 5.0%
WACC (real; after tax) % 2.4%
Capital recovery factor (nominal; Calculation
after tax) % 7.1%
Capital recovery factor (real; after
tax) % 5.4%
Depreciation schedule 5-year MACRS Standard for U.S. wind projects
Depreciation adjustment (NPV) % 87.4%
Calculation
FCR (nominal) % 7.4%
FCR (real) % 5.6%
56

2018 Cost of Wind Energy Review: Tyler Stehly and Philipp Beiter

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2018 Cost of Wind Energy Review: Tyler Stehly and Philipp Beiter

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2018 Cost of Wind Energy Review

Tyler Stehly and Philipp Beiter

NREL is a national laboratory of the U.S. Department of Energy Technical Report

Contract No. DE-AC36-08GO28308

NREL is a national laboratory of the U.S. Department of Energy Technical Report

This report is available at no cost from the National

U.S. Department of Energy (DOE) reports produced

NREL prints on paper that contains recycled content.

The primary elements of this report include:

• Estimated LCOE for a representative, land-based wind project installed in a moderate

Key Inputs and Results

2.4-MW Land-Based 2.4-MW Land-Based

Operational expenditures (OpEx) ($/kW/year [yr]) 44 12.1

5.5-MW Fixed-Bottom 5.5-MW Fixed-Bottom

OpEx ($/kW/yr) 129 30.3

5.5-MW Floating 5.5-MW Floating

OpEx ($/kW/yr) 137 41.2

Note: GPRA values are not reported for floating technology.

• Estimated LCOE for a representative, land-based wind project installed in a moderate

(CapEx × FCR) + OpEx

LCOE = levelized cost of energy ($/megawatt-hour [MWh])

FCR = fixed charge rate (%)

CapEx = capital expenditures ($/kilowatt [kW])

AEPnet = net average annual energy production (MWh/megawatt [MW]/year [yr])

OpEx = operational expenditures ($/kW/yr).

Table 2. Offshore Fixed-Bottom Wind GPRA Baseline and Target LCOE

2019 (Baseline) 2030 (Target)

Table 3. Land-Based Reference Project Parameters

4.2 Land-Based Capital Expenditures

2.4-MW Land-Based 2.4-MW Land-Based

Nacelle module 498 10.3

Development cost 16 0.3

Total capital expenditures 1,470 30.3

4.3 Land-Based Technology Characteristics and Annual Energy

Table 5. Reference Land-Based Turbine Parameters

4.3.2 Wind Resource

4.3.3 Losses and Availability

Table 7. Reference Land-Based-Wind Losses and Availability Assumptions

4.3.4 Annual Energy Production

4.4 Land-Based Operation and Maintenance Expenditures

Table 9. Land-Based-Wind Reference Project OpEx

2.4-MW Land-Based 2.4-MW Land-Based

4.5 Land-Based-Wind Finance

4.5.1 Discount Rate

4.5.2 Economic Evaluation Metrics

4.6 Land-Based-Wind Levelized Cost of Energy

2.4-MW Land-Based 2.4-MW Land-Based

OpEx ($/kW/yr) 44 12.1

4.7 Land-Based-Wind Levelized Cost of Energy Sensitivities

Figure 4. Sensitivity of land-based-wind LCOE to key input parameters

4.8 Land-Based Supply Curve

4.9 Land-Based-Wind Discussion of Results in Context of DOE Goals

5.1 Offshore Reference Project

5.2 Offshore Capital Expenditures

5.5-MW Fixed-Bottom 5.5-MW Fixed-Bottom

TURBINE CAPITAL COST 1,301 17.2

Development cost 138 1.8

TOTAL CAPITAL EXPENDITURES 4,444 58.8

5.5-MW Floating 5.5-MW Floating

TURBINE CAPITAL COST 1,301 22.0

Development cost 165 2.8

TOTAL CAPITAL EXPENDITURES 5,355 90.7