Influence of Global Warming Potential taxation on Levelized Cost of Energy and Life Cycle Assessment of Off-shore Wind Farms
Abstract
This project investigated the impact of CO2 equivalent taxation on the Levelized Cost of Energy for Offshore Wind Farms. Using models from TOPFARM and INNWIND, it was found that taxation on steel and cables can influence wind farm layouts, leading to designs that differ from current practices. Taxing materials like steel and cables can encourage stakeholders and decision makers to minimize CO2 equivalent emissions. The approach presented in this project can lead to shorter inter array cable lengths and the relocation of wind turbines to areas with shallower water depths, as well as maximising the energy production taking wakes into account. The selection of wind turbine models significantly influences both the Levelized Cost of Energy and the Life Cycle Assessment. Larger wind turbines can access higher wind speeds, thereby enhancing energy generation. However, these larger turbines are typically installed in deeper waters, necessitating more steel in their substructures. This increased steel usage is more vulnerable to the effects of a CO2eq tax, set as 97.5 e/ton CO2eq for this project, due to the relatively high Global Warming Potential reported in Environmental Product Declarations. This project evaluates several scenarios by comparing the current offshore wind farm, Horns Rev 1, with optimized models and the planned offshore wind farm, Thor, with the same models. The optimization models have shown that the Levelized Cost of Energy of Horns Rev 1, excluding any taxes, is 38.14 e/MWh. However, with the implementation of a CO2eq tax, this can be reduced to 37.92 e/MWh by changing the substation position, cable layout, and turbine positions. This indicates that even though the overall costs of the wind farm may rise, optimizing the wind turbine positions and cable layout can still lower the Levelized Cost of Energy, in this case, by a reduction of 0.58%. Applying the same method to the planned layout of the Thor Wind Farm, the Levelized Cost of Energy is expected to increase from 43.72 e/MWh to 44.03 e/MWh, an increase of 0.71%. The most noticeable difference between the two wind farms lies in the design phase practices. Although the Levelized Cost of Energy increases with the addition of the CO2eq tax, the Levelized Cost of Energy can still decrease if the tax is implemented onto the planned layout, comparing to the optimized scenarios. This underscores the need to further explore and develop offshore wind farm planning, especially in anticipation of future CO2eq taxation. It also highlights the potential benefits of cross-functional collaboration between different departments in the industry.
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Jørgensen, Emma Koch; Jakobsen, Freja Rølle. (2024). Influence of Global Warming Potential taxation on Levelized Cost of Energy and Life Cycle Assessment of Off-shore Wind Farms.
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