Wave energy vs. other energy sources: A reassessment of the economics

ABSTRACT

The large scatter in the predictions of wave energy costs, which is caused in part by the simplifications assumed by existing models, is a hindrance for the development of this promising renewable. In this context, the main objective of this paper is to reassess the cost of wave energy taking into account a number of elements that are usually overlooked, or not considered simultaneously. This analysis has been performed in relation to the European context. The direct and indirect costs of a wave farm are examined, and a value for each is presented. The levelized cost (€/MWh) of wave energy is then calculated for different scenarios in order to compare the profitability of wave energy with that of other energy sources. After that, a sensitivity analysis is carried out to identify the main parameters affecting the total cost, considering in particular the effect on the levelized cost of considering: (i) the cost reductions arising from economies of scale and technological effects; (ii) an O&M cost variable throughout the useful life of the farm; and (iii) the externalities. In sum, this work sets the basis for a thorough economic comparison of wave energy with other sources of energy.

KEYWORDS:

• Economic analysis
• externalities
• levelized cost
• sensitivity analysis
• wave energy

Funding

This work was carried out within the framework of the project “Atlantic Power Cluster,” funded by the European Commission through its Atlantic Area Programme. During this work S. Astariz has been supported by the Government of Galicia (Xunta de Galicia) through its “Plan galego de investigación, innovación e crecemento” Plan I2C 2011–2015 (Contract No. PRE/2012/604).

Additional information

Funding

This work was carried out within the framework of the project “Atlantic Power Cluster,” funded by the European Commission through its Atlantic Area Programme. During this work S. Astariz has been supported by the Government of Galicia (Xunta de Galicia) through its “Plan galego de investigación, innovación e crecemento” Plan I2C 2011–2015 (Contract No. PRE/2012/604).