Levelized Revenue and Value of Energy (LRVE) will improve global assessment of offshore wind projects that are increasingly competing on market terms and allow companies to compare cost and revenue of energy projects on levelized terms.
The paper ‘Toward global comparability in renewable energy procurement’ is published today in the journal Joule. Lena Kitzing, Head of Section at DTU Wind Energy, is one of the authors of the paper. The metric is necessary, they argue, because the value of energy will become ever more important in an increasingly competitive environment.
“We live in changing world where wind farms and other renewable energy technologies are competing on the market” Lena explains, “In order to capture all these value elements, we have developed this new metric that looks into what kinds of value and revenue elements are obtained by the wind farm over its whole lifetime and then adding them together. We have already looked at the cost side like that for a long time – in LCOE -, so here, we are actually transferring this same thinking to the value side- The beauty of it is that these two metrics then become comparable and you can use them to validate each other”
The numbers from established cost metrics like the LCOE (Levelized Cost of Energy) are often hard to obtain due to their commercially sensitive nature. The paper evaluates the financial and technology performance of eight global offshore wind energy projects, showing that the LRVE metric can provide a more accurate and consistent assessment of the cost of renewable energy projects across time and different jurisdictions globally.
Lena explains the research in more detail in this video:
And read the paper in Joule.
Authors:
Philipp Beiter (lead) NREL, USA
Lena Kitzing, DTU Wind Energy, Denmark
Paul Spitsen, DoE, USA
Miriam Noonan, ORE Catapult, UK
Volker Berkhout, Fraunhofer IEE, Germany
Yuka Kikuchi, University of Tokyo