Offshore wind energy must take climate change into account in financial models

With offshore wind production expected to increase 15-fold over the next two decades, turning it into a $1 trillion industry, it is imperative that developers consider the future impacts of climate change on wind resources.

While offshore wind energy has enormous potential, its weather-dependent nature creates challenges that must be overcome to ensure the long-term viability and viability of offshore wind projects.

For example, the wind drought that hit most of Europe in the summer and early fall of 2021 led to a more than 30% reduction in energy production. Models show that such events are likely to become more frequent.

This is confirmed by a study conducted by Youwind in cooperation with Climate Scale, which was recently published in the Science Journal of Physics, Conference Series, IOP. The study consisted of analyzing the impact of climate change on the economic indicators of the offshore wind farm project. Three different ‘socio-economic pathways’ were analyzed for three key wind farm development areas: the Irish Sea (IS), the Princess Elizabeth Zone (PEZ) and Fortaleza, Brazil (BF).

The results show that climate change impacts have led to a decline in the internal rate of return (IRR) for projects in IS and PEZ sites since the 2040s compared to IRR projections based on historical wind data. However, the results for BF were neutral or positive.

This reflects Climate Scale models predicting that the mid-latitudes of the Northern Hemisphere are likely to experience the most significant negative impacts from changes in atmospheric circulation caused by climate change. This significant difference in results from different climate models highlights the long-term uncertainty in how wind energy resources will change and shift.

This study was presented at the TORQUE 2024 wind energy conference in Florence. Stresses the importance of incorporating long-term climate-scale models into project planning and financial analyses. The timing of offshore wind projects is important to consider – over the 30+ year life of a facility, wind patterns can change, impacting project costs, energy production and overall profitability. This comprehensive approach will enable developers to identify potential risks and make informed decisions that will increase the resilience and sustainability of their projects.

“Providing developers with the tools to consider the impacts of climate change on offshore wind projects, as well as coping with the uncertainty of climate scenarios, is essential,” said Pieter Gebraad, chief development engineer at Youwind. “Climate modeling provides critical insight into how global warming affects atmospheric circulation and wind patterns. By combining our expertise with experts in climate change modeling, we can provide a more complete understanding of potential risks and opportunities, ensuring wind farms remain resilient and economically viable in the face of changing wind patterns.”

As part of this initial collaboration with Climate Scale, Youwind is actively developing solutions to better address the impacts of climate change on wind energy projects, ensuring a resilient and sustainable future for offshore wind development.

Additional information:

Youwind Renewable Energy Sources

Climate scale