Energy

Hybrid projects: How to reduce costs and space of offshore developments

Hybrid projects: How to reduce costs and space of offshore developments

May 2019

Hybrid projets: How to reduce costs and space of offshore developments, North Seas Offshore Energy Clusters study

Europe’s energy system is changing, driven by society’s desire to decarbonise and switch to cleaner, renewable energy sources. The European Commission and the EU Member States back these goals; they have signed the UN’s Paris Agreement to limit global temperature rises and agreed to increase the amount of energy produced from renewables.

These aims are only achievable with offshore wind power. To fulfil them, existing offshore assets should be cost-effectively and sustainably expanded to fully utilise the vast wind-energy potential of the North Seas.

Hybrid projects offer a solution. They combine offshore generation and transmission assets, which conventionally operate as separate entities. This enables them to link projects and provides a platform for coordination between countries. Such projects have several advantages over conventional offshore projects. They are cheaper, use less space and pave the way towards a future integrated energy system in the North Seas region. Ultimately, they can contribute to making the energy transition and decarbonisation happen.

As such, there is a clear need to assess the use of hybrid projects in real terms. This study identifies 18 potential hybrid projects, based on existing conventional projects in the North Seas that are in early-stage development. It assesses the five most feasible projects against their conventional reference cases in terms of capital expenditures, lifetime operating expenses and socio-economic welfare.

The study finds that the five projects show cost saving potentials of up to 10%, or up to EUR 2,500 million, depending on the size of the comparable conventional project. But it also finds that hybrid projects face significant legal, regulatory and other barriers. To address these, the study proposes project-specific Action Plans outlining the mitigation measures stakeholders can take. Finally, the study provides recommendations on implementing future hybrid projects, thereby paving the way to a future-proof European energy system.