Counting Costs: Decommissioning of offshore wind farm assets
9 October 2015
To date, no offshore renewable energy project has decommissioned its assets, apart from a meteorological mast.
This is simply because no offshore project has reached the end of its life. As a consequence, there is little practical experience within the industry to draw upon when it comes to estimating the costs for decommissioning guarantees / finance (e.g., a bond, mid-life accrual fund, or letter of credit), other than lessons learnt from oil & gas.
Globally, offshore renewables are spreading from its well-defined routes in Europe to more emerging markets, where the need for electricity power is exceeding demands due to industrialization. Whilst the deployment of renewables may counter-balance future power demand short-falls and contribute to meeting CO2 emission targets, they are a long way from the prospect of decommissioning. Yet, planning appropriate decommissioning strategies and estimating their costs need to be considered early in a projects life-cycle to adequate secure bond fi nance and meet legislative requirements.