Modeling the decommissioning cost of offshore wind development on the U.S. Outer Continental Shelf

Mark J. Kaiser and Brian Snyder

Marine Policy, 2012, vol. 36, issue 1, 153-164

Abstract: The U.S. government requires renewable energy facilities installed in federal waters provide financial security to help ensure decommissioning obligations are carried out in the event the operator is unable to meet its obligations or goes bankrupt. The size of the bond is determined by the estimated decommissioning cost and is required prior to the approval of construction activities. The purpose of this paper is to develop decommissioning cost estimates for proposed U.S. offshore wind farms. Removal and site clearance cost are estimated across each stage of activity using empirical and hypothetical relations under current technology and market conditions without inflationary adjustment. Preliminary development plans characterize and define the system and serve as model input. A bottom-up approach based on operational stages is developed across removal, transport, processing and disposal activities. Disposal cost is calculated on a per ton basis and is estimated separately for each wind farm component. The model is parameterized with data from four proposed U.S. offshore wind farms and decommissioning costs are found to range from 115,000 to 135,000Â $/MW, approximately 3-4% of estimated capital costs.

Keywords: Decommissioning; Bonding; requirements; Empirical; modeling; Offshore; wind (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (7)

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