Lines of offshore wind turbines in the rolling surf off the North Sea coast

Offshore Wind Farm Merit Order Study, UK

Custom tool solution based on a merit order study

AFRY prepared a merit order study of offshore wind farms in the UK and provided a custom designed economic modelling tool for the client, a confidential fund managing company in the UK.

Services provided for the study

A database was created of key project information for each UK offshore wind asset over 50 MW (close to 40 operating projects plus ca. 30 in development and construction) and a valuation tool was designed to allow economic modelling and strike price projections of all offshore wind assets in the UK.

The valuation tool includes:

  • Revenues from AFRY’s offshore wind capture price projections and relevant subsidy schemes
  • Load factors relating to P50 approximations
  • Cost assumptions taking into consideration factors such as water depth, distance from shore, turbine model, foundation type, OFTO arrangements, insurance, decommissioning
  • Financial model and assumptions, such as loan tenor, target equity IRR and project WACC.
    Map of UK with marked offshore wind farm locations
    Offshore wind farm locations off the UK coastline

    Results and value added

    The Client has an accessible tool at hand to guide their business internal decision-making. Through an iterative and interactive process with the Client, the tool has been designed in a bespoke manner

    Year: 2021