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Better estimates of LCOE from audited accounts: a new methodology with examples from United Kingdom offshore wind and CCGT.

Aldersey-Williams, John; Broadbent, Ian D.; Strachan, Peter A.

Authors

John Aldersey-Williams

Ian D. Broadbent

Peter A. Strachan



Abstract

Around the world, government policies to support new renewable energy technologies rely on accurate estimates of Levelised Cost of Energy (LCOE). This paper reveals that such estimates are based on 'public domain' data which may be unreliable. A new approach and methodology has been developed which uses United Kingdom (UK) 'audited' data, published in company accounts, that has been obtained from Companies House, to determine more accurate LCOE estimates. The methodology is applicable to projects configured within Special Purpose Vehicle (SPV) companies. The methodology is then applied to a number of UK offshore wind farms and one Combined Cycle Gas Turbine (CCGT) project to develop new cost data which is then compared to that presently in the public domain. The analysis reveals that recent offshore wind projects show a slightly declining LCOE and that public domain cost estimates are unreliable. But of most concern is that offshore wind farm costs are still much higher than those implied by recent bids for UK government financial support via Contracts for Difference (CfDs). The paper concludes by addressing further the question of how offshore wind projects can achieve the degree of LCOE reductions required by recent CfD bids.

Journal Article Type Article
Publication Date May 31, 2019
Journal Energy policy
Print ISSN 0301-4215
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 128
Pages 25-35
Institution Citation ALDERSEY-WILLIAMS, J., BROADBENT, I.D. and STRACHAN, P.A. 2019. Better estimates of LCOE from audited accounts: a new methodology with examples from United Kingdom offshore wind and CCGT. Energy policy [online], 128, pages 25-35. Available from: https://doi.org/10.1016/j.enpol.2018.12.044
DOI https://doi.org/10.1016/j.enpol.2018.12.044
Keywords LCOE; Offshore wind; Accounts

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