How Expensive Is Expensive Enough? Opportunities for Cost Reductions in Offshore Wind Energy Logistics

• Main Authors: Thomas Poulsen, Charlotte Bay Hasager
• Format: Article
• Language: English
• Published: MDPI AG 2016-06-01
• Series: Energies
• Subjects: offshore wind; logistics; logistics innovation; organization; levelized cost of energy; LCoE (levelized cost of energy)
• Online Access: http://www.mdpi.com/1996-1073/9/6/437

This paper reveals that logistics may conservatively amount to 18% of the levelized cost of energy for offshore wind farms. This is the key finding from an extensive case study carried out within the organization of the world’s leading offshore wind farm developer and operator. The case study aimed to, and produced, a number of possible opportunities for offshore wind cost reductions through logistics innovation; however, within the case study company, no company-wide logistics organization existed to focus horizontally on reducing logistics costs in general. Logistics was not well defined within the case study company, and a logistics strategy did not exist. With full life-cycle costs of offshore wind farms still high enough to present a political challenge within the European Union in terms of legislation to ensure offshore wind diffusion beyond 2020, our research presents logistics as a next frontier for offshore wind constituencies. This important area of the supply chain is ripe to academically and professionally cultivate and harvest in terms of offshore wind energy cost reductions. Our paper suggests that a focused organizational approach for logistics both horizontally and vertically within the company organizations could be the way forward, coupled with a long-term legislative environment to enable the necessary investments in logistics assets and transport equipment.