**3. Commercial viability studies**

Commercial viability studies are important to attract the investors for expensive offshore systems. Offshore development in general and wind projects in particular are complex, capitalintensive engineering endeavors, and a large number of factors influence development. The design, logistics, vessel requirements, and physical infrastructure of each offshore farm are unique but a number of similarities exist between projects. The environmental conditions, the level of competition, and government support are regional and country-specific and they play a key role in offshore wind viability studies.

The capital cost of offshore wind turbine systems is significantly higher than land-based systems because of the higher cost in foundations, installation, operation and maintenance, and complex logistics. The offshore environment is significantly more uncertain and difficult than onshore and thus more costly and risky. The offshore environment involves personnel traveling to and from offshore turbines, and this increases equipment and time costs as well as insurance costs due to increased risks. Offshore work involves increased risks of strong winds which affect the amount of time available for maintenance and installation which in turn influence capital and operation costs. Offshore environments are corrosive to electrical and structural equipment and require turbines to be marinized with cathodic and humidity protection. Capital expenditures for offshore wind projects depend on marine vessel day rates which are uncertain, and offshore foundations require more steel for jackets and pilings than onshore foundations. The components that affect the capital cost of wind turbine are (1) wind turbine and its installation, (2) substructure and its installation, and (3) electrical systems and its installation (inner array cables, export cables, and substation).

The capital cost is modeled with hypothetical 170-MW wind farm composed of 50, 3.4-MW turbines. The turbine data available in open source are considered (Repower) for this study. The farm considered in shallow water of 10–15-m water depth with a 5-m diameter monopile with 100-mm thick and 30-m penetration into seabed. The cost of various components, operation and maintenance cost, is considered as per existing wind farms and modified to Indian conditions, which is explained in detail in subsequent sections.

The primary capital cost for onshore wind projects is the turbine; installation costs make up about 14% of the total capital costs. For offshore wind projects, the cost of installation is higher, approximately 20% of the total costs, and the costs of building the foundations account for another 20% of capital costs. For offshore wind, operation and maintenance costs make up a larger proportion of the overall components of the COE. This is likely due to the costs of accessing offshore wind farms and maintaining turbines in operating condition. The components considered are substructure, transition piece, wind turbine, installation of the above three components, inner array and export cables laying, and offshore substation installation [1, 14–19].

### **3.1. Substructure and transition piece**

One of the most significant challenges facing offshore wind engineers is the effective and costefficient fixing of the turbine tower to the seabed. To date, this has typically been achieved via a monopile foundation which constitutes approximately 20–25% of the total capital expenditure in offshore wind farm construction. In this study, monopile- and gravity-based foundations are considered for capital cost estimation. For substructure and transition piece fabrication, Rs. 200/− per kg is considered based on the market studies for monopile and Rs. 25,000/− per cubic meter for gravity foundation (including concrete reinforcement and handling).

#### **3.2. Wind turbine**

**Figure 5.** Installed LiDAR at Gulf of Khambhat for MNRE-NIWE.

152 Stability Control and Reliable Performance of Wind Turbines

**3. Commercial viability studies**

a key role in offshore wind viability studies.

The wind resource assessment is proposed to be validated with LiDAR-based data collection platform. These platforms were designed and successfully installed with the technical support of the National Institute of Ocean Technology (NIOT) at Gulf of Khambhat for M/s NIWE and Gulf of Kutch for M/s Suzlon to obtain wind velocities along with profiles. The platforms at Gulf of Khambhat and Gulf of Kutch have been installed in high tidal currents and poor soil conditions (**Figure 5**). The substructure (monopile) shown in **Figure 5** supports the data collection equipment/wind turbine by absorbing the environmental loads acting on it. The monopile is fabricated using the steel plates and mobilized using barges and installed at the site.

Commercial viability studies are important to attract the investors for expensive offshore systems. Offshore development in general and wind projects in particular are complex, capitalintensive engineering endeavors, and a large number of factors influence development. The design, logistics, vessel requirements, and physical infrastructure of each offshore farm are unique but a number of similarities exist between projects. The environmental conditions, the level of competition, and government support are regional and country-specific and they play

The capital cost of offshore wind turbine systems is significantly higher than land-based systems because of the higher cost in foundations, installation, operation and maintenance, and complex logistics. The offshore environment is significantly more uncertain and difficult than onshore and thus more costly and risky. The offshore environment involves personnel traveling to and from offshore turbines, and this increases equipment and time costs as well as insurance costs due to increased risks. Offshore work involves increased risks of strong winds which affect the amount of time available for maintenance and installation which in turn influence capital and operation costs. Offshore environments are corrosive to electrical and structural equipment and require turbines to be marinized with cathodic and humidity The wind turbine itself is the most important cost component of an offshore wind project constituting from 30 to 40% of the total capex. Here, the turbine cost is considered based on interaction with the Original Equipment Manufacturers (OEMs). A range of interacting drivers will affect costs into the future, like increasing competition, competing markets, innovation, scale effects, and standardization before drawing conclusions about the overall scale and trajectory of change to turbine costs.

#### **3.3. Installation**

Foundation, turbine, substation, and cable installation together comprise approximately 20% of overall capex. At present, no offshore wind projects have been developed or are under construction in India, and since there is no direct Indian experience to draw upon, a comparative statistical assessment is used in the analysis. In this study, the installation methodology used in European offshore projects is reviewed; the costing of marine spread is accounted for considering the availability in India and nearby countries like Singapore, Middle East, and Korea.

wind power cable is usually buried in the seafloor. There are several methods for installation, but in most cases, cable is simultaneously laid and buried by either an underwater plow or a remotely operated vehicle (ROV). Presently, such barges are available in countries like Singapore and Malaysia nearer to India. Hence, the cost of bringing the vessel from Singapore or Malaysia (1600 nm), the travel time of 10 days (for both ways) at a speed of 15 knots, the installation rate of 0.7 km/day, and the hiring rates of 125,000 USD/day for export cable and

The grid infrastructure is a concern for renewable energy in India and will be facing challenges for offshore wind developments due to large-scale variable generation technology. These challenges include grid strengthening, grid/code balance at national scale, and so on. Technical Standard for Grid Connectivity such as Grid Code (IEGC 2010) and GEGC-2004 can be updated. The capital cost is estimated for three cases comprising different scenarios, and the summary

Case 1: Considering the present scenario in India, with most of the marine spread from nearby

Case 2: Assuming the required marine spread to be available in India and using optimistic

Case 3: Considering innovative gravity-based foundation for Rameshwaram based on site-

A study was conducted to check the commercial viability of offshore wind farms along Tamil Nadu coast. The general cash flow for a wind turbine is shown in **Figure 6**. The capital cost for setting up a wind turbine is raised by an investor with certain equity and the rest as debited from bank at an interest rate during loan tenure. In India, Indian Renewable Energy Development Agency Limited (IREDA) provides soft loans for 70% of capital cost with an interest rate of 11.90–12.50% based on grade for a tenure of 10–15 years. However, if the tenure is more than 12 years, an additional interest rate will be charged. In this study, an interest

**S. no. Component Cost in Indian rupees (crores)**

 Foundation (material and fabrication) 9.81 9.81 1.5 Transition piece (material and fabrication) 3.67 3.67 3.67 Installation of substructure and transition piece 4.25 1.48 0.07 Turbine 23.8 23.8 23.8 Installation of wind turbine 6.40 1.90 1.90 Electrical infrastructure (material and installation) 10.68 8.84 8.84 Port-handling charges and project development 2.17 1.89 3.25

Total 60.78 51.40 43.05

**Table 2.** Capital cost summary for hypothetical 170-MW wind farm consisting of 50 numbers of 3.4 MW turbines.

**Case 1 Case 2 Case 3**

Offshore Wind Feasibility Study in India http://dx.doi.org/10.5772/intechopen.74916 155

countries and using average installation rates per unit-based existing wind farms [14].

50,000 USD for in-array cables are all inclusive.

installation rates per unit based on existing wind farms [14].

specific soil stratum in addition to Case 2.

is provided in **Table 2**.

### *3.3.1. Foundation installation*

Monopile foundations consist of a large cylindrical steel pile and a steel structure (transition piece) placed over and grouted onto the monopile. Monopiles may be transported to the site by the installation vessel (considered in this study); they may be barged to the site, they may be transported by a feeder vessel, or they may be capped and wet-towed. The pile is upended by a crane and/or a specialized pile-gripping device, and a hydraulic hammer drives the pile into the seabed to a predetermined depth. The time to drive the piles depends on the soil type, diameter and thickness of the piles, burial depth, and the weight of the hammer. A rocky subsurface may prevent driving operations, in which case a drill will be inserted into the pile to drill through the substrate. After the monopile is secured, a transition piece is grouted onto the pile. The transition piece is typically installed immediately after piling by the same vessel that drove the pile, but if two vessels are employed in installation, a separate vessel may follow behind the foundation installation. The area around the monopile may need to be protected with rocks to guard against erosion (scour protection).

All these activities need to be performed in a highly dynamic offshore environment, and hence expensive vessels are required for safe installation. Presently, such barges are available in countries like Europe, Chain, Japan, and Korea only. Based on the ease of transportation, Korean vessels are considered for cost estimation with day rates as per market rates. The cost of bringing the vessels from Korea (4000 nm), the travel time of 60 days (for both ways) at a speed of 6 knots, the installation rate of 3.1 days per unit [14], and hiring rates of 140,000 USD/ day all inclusive are considered along with the tug.

#### *3.3.2. Turbine*

There are a large number of options for turbine installation. The method used to install turbines is determined by available vessels, the turbine model, and the desire to minimize the number of offshore lifts. If the number of lifts is minimum, it is noted that crane capacity will increase accordingly.

As mentioned in Section 3.3.1, these vessels also should be obtained from the same countries. Based on the ease of transportation, Korean vessels are considered for cost estimation with day rates as per literature and market. The cost of bringing the vessel from the Korea (4000 nm), the travel time of 36 days (for both ways) at a speed of 10 knots, the installation rate of 4.0 days per unit, and the hiring rates of 200,000 USD/day are all inclusive.

#### *3.3.3. Electrical infrastructure*

The electrical infrastructure at an offshore wind farm includes inner-array cables which connect turbines together in series, export cable which transmits electricity to shore, and, potentially, one or more electrical substations to increase voltage prior to export. Offshore wind power cable is usually buried in the seafloor. There are several methods for installation, but in most cases, cable is simultaneously laid and buried by either an underwater plow or a remotely operated vehicle (ROV). Presently, such barges are available in countries like Singapore and Malaysia nearer to India. Hence, the cost of bringing the vessel from Singapore or Malaysia (1600 nm), the travel time of 10 days (for both ways) at a speed of 15 knots, the installation rate of 0.7 km/day, and the hiring rates of 125,000 USD/day for export cable and 50,000 USD for in-array cables are all inclusive.

statistical assessment is used in the analysis. In this study, the installation methodology used in European offshore projects is reviewed; the costing of marine spread is accounted for considering the availability in India and nearby countries like Singapore, Middle East, and Korea.

Monopile foundations consist of a large cylindrical steel pile and a steel structure (transition piece) placed over and grouted onto the monopile. Monopiles may be transported to the site by the installation vessel (considered in this study); they may be barged to the site, they may be transported by a feeder vessel, or they may be capped and wet-towed. The pile is upended by a crane and/or a specialized pile-gripping device, and a hydraulic hammer drives the pile into the seabed to a predetermined depth. The time to drive the piles depends on the soil type, diameter and thickness of the piles, burial depth, and the weight of the hammer. A rocky subsurface may prevent driving operations, in which case a drill will be inserted into the pile to drill through the substrate. After the monopile is secured, a transition piece is grouted onto the pile. The transition piece is typically installed immediately after piling by the same vessel that drove the pile, but if two vessels are employed in installation, a separate vessel may follow behind the foundation installation. The area around the monopile may need to be

All these activities need to be performed in a highly dynamic offshore environment, and hence expensive vessels are required for safe installation. Presently, such barges are available in countries like Europe, Chain, Japan, and Korea only. Based on the ease of transportation, Korean vessels are considered for cost estimation with day rates as per market rates. The cost of bringing the vessels from Korea (4000 nm), the travel time of 60 days (for both ways) at a speed of 6 knots, the installation rate of 3.1 days per unit [14], and hiring rates of 140,000 USD/

There are a large number of options for turbine installation. The method used to install turbines is determined by available vessels, the turbine model, and the desire to minimize the number of offshore lifts. If the number of lifts is minimum, it is noted that crane capacity will

As mentioned in Section 3.3.1, these vessels also should be obtained from the same countries. Based on the ease of transportation, Korean vessels are considered for cost estimation with day rates as per literature and market. The cost of bringing the vessel from the Korea (4000 nm), the travel time of 36 days (for both ways) at a speed of 10 knots, the installation rate

The electrical infrastructure at an offshore wind farm includes inner-array cables which connect turbines together in series, export cable which transmits electricity to shore, and, potentially, one or more electrical substations to increase voltage prior to export. Offshore

of 4.0 days per unit, and the hiring rates of 200,000 USD/day are all inclusive.

protected with rocks to guard against erosion (scour protection).

day all inclusive are considered along with the tug.

*3.3.2. Turbine*

increase accordingly.

*3.3.3. Electrical infrastructure*

*3.3.1. Foundation installation*

154 Stability Control and Reliable Performance of Wind Turbines

The grid infrastructure is a concern for renewable energy in India and will be facing challenges for offshore wind developments due to large-scale variable generation technology. These challenges include grid strengthening, grid/code balance at national scale, and so on. Technical Standard for Grid Connectivity such as Grid Code (IEGC 2010) and GEGC-2004 can be updated.

The capital cost is estimated for three cases comprising different scenarios, and the summary is provided in **Table 2**.

Case 1: Considering the present scenario in India, with most of the marine spread from nearby countries and using average installation rates per unit-based existing wind farms [14].

Case 2: Assuming the required marine spread to be available in India and using optimistic installation rates per unit based on existing wind farms [14].

Case 3: Considering innovative gravity-based foundation for Rameshwaram based on sitespecific soil stratum in addition to Case 2.

A study was conducted to check the commercial viability of offshore wind farms along Tamil Nadu coast. The general cash flow for a wind turbine is shown in **Figure 6**. The capital cost for setting up a wind turbine is raised by an investor with certain equity and the rest as debited from bank at an interest rate during loan tenure. In India, Indian Renewable Energy Development Agency Limited (IREDA) provides soft loans for 70% of capital cost with an interest rate of 11.90–12.50% based on grade for a tenure of 10–15 years. However, if the tenure is more than 12 years, an additional interest rate will be charged. In this study, an interest


**Table 2.** Capital cost summary for hypothetical 170-MW wind farm consisting of 50 numbers of 3.4 MW turbines.

**4. Development of substructures for offshore wind**

adopted [22].

sidered are shown in **Figure 7**.

**Figure 7.** Gravity, monopile and jacket substructure configurations.

**4.1. Methodology**

The support platform costs about 24% [20] of the total system cost and needs to be optimized to increase the commercial viability of offshore wind projects. The substructure concepts used to support offshore wind turbine include monopiles, gravity-based structures, jackets, tripods, tripiles, and floating platforms [21]. The choice of foundation depends on water depth, environmental, and geotechnical conditions. Monopiles and gravity-based foundations are generally adopted for shallow water depth below 30 m. As the water depths increase, these foundations yield larger lateral deflection and rotations at a nacelle level. Therefore, a braced frame structure like jacket and tripod is used at a transition water depth of 30–50 m. In ultra-deep water (>50 m), floating compliant structures are

Offshore Wind Feasibility Study in India http://dx.doi.org/10.5772/intechopen.74916 157

The preliminary analysis of site and environmental conditions indicate the suitability of monopile along Gulfs of Gujarat due to shallow water depths, gravity-based foundations at Rameshwaram due to shallow water depths and moderated soil conditions, and jackets at Kanyakumari due to moderate depths and soil conditions. Therefore, the preliminary design of three substructure concepts, monopile, gravity, and jacket, based on static and earthquake loadings was taken up. The typical configurations of three substructure configurations con-

The optimum substructure configuration for offshore wind turbine can be arrived only by considering the in-place behavior of structure along with suitable installation methodology.

**Figure 6.** Cash flow for wind turbine project.

rate of 12.5% for a tenure of 12 years is considered. After commissioning of wind farm, the components that contribute for cash-out flow are insurance (0.1% of initial cost) and operation and maintenance charges. The returns include unit price paid for electricity produced, fiscal incentives, and income tax depreciation. The main incentives provided by the Indian government for wind energy are generation-based intensive (GBI) and renewable energy certificates (RECs). GBI of Rs. 0.50/kWh will be provided with a cap of Rs. 1 crore/MW for a period of 10 years through IREDA. The Central Electricity Regulatory Commission (CERC) has notified that the floor and ceiling prices will range from Rs. 1.5 to 3.9 per unit (for non-solar RECs) [17]. In this study, RECs of Rs. 1.5/kWh is considered. The accelerated depreciation of 80% in the first year is reinitiated in 2014. All these incentives are considered in this study.

Developers should structure the repayments which will give the lenders a comfortable zone and aim for higher debt-service coverage ratios. For banks to finance a wind farm, an average DSCR of 1.3 is required. The unit prices of electricity for three different scenarios are listed in **Table 3** for a DSCR of 1.3 at P50 PLF level.


**Table 3.** Unit pricing with and without incentives.
