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Reducing energy risk for offshore wind investments

The high prices paid for the Bureau of Ocean Energy Management leases in the recent New York Bight Auction have drawn attention to the high stakes involved in developing offshore wind projects. The highest winning bid was more than a billion dollars for lease area OCS-A 0539 paid by Bight Wind Holdings, a partnership between RWE and National Grid. As soon as the results were announced, industry watchers started to work out how the economics would work to allow the winners to generate profits.

One of the most important parts of the financial equation is the estimate of the energy a farm will produce once built. The revenue from the farm will be directly proportional to this estimate. There are unique challenges to calculating the energy yield of an offshore farm that can make it difficult to arrive at an energy estimate in which the developers can have a high degree of confidence. Reducing the uncertainty of offshore wind resource and energy assessments is a difficult, but essential, task.



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