Economic Costs

Renewable energy must compete economically with today's standard energy resources. One reason ocean energy is slow to develop in the United States is the associated comparative costs (Navigant 2014).

The charts on this page compare three economic variables that impact feasibility: the levelized cost of energy (LCOE), which is the cost to build and operate an energy generation device over its lifetime divided by the total power generated over its lifetime, the capital cost of energy, which is the start-up cost for a project, and the net capacity factor, which is the ratio of actual energy output in comparison to full potential of energy generated. The ideal energy resource has a low LCOE and capital cost and a high capacity factor.

New technologies characteristically have high costs and high variability of costs. As an industry advances, infrastructure and knowledge increase, and risk of investment becomes more advanced, driving the cost and cost variability down. Offshore renewable energy is characterized as a new energy type, and as such, the costs listed here are expected to decrease (Daniel et al. 2014).

Environmental Costs:

The understanding of potential environmental impacts of offshore renewable energy is limited and highly dependant on the size, site, and technology type of the energy proposed. Assessing and planning based on environmental impact is another key consideration in offshore renewable energy development.

Search the TETHYS database for a repository of studies on environmental effects from offshore renewable energy. See below for a quick glimpse at potential environmental impacts.

Resource	Element	Potential hazard	To lower risk...
Wind, Tidal, Current, Wave	Laying Cables	Disturbance, injury, and death of benthic habitat and creatures	Plan cable paths that minimize damage to significant benthic habitats
Wind, Tidal, Current, Wave	Underwater device installation	Disturbance, displacement, and death of benthic habitat and creatures	Avoid development on top of significant benthic habitats. Bonus: May act as an artificial reef, attracting the growth of plants and animals
Wind, Tidal, Current, Wave	Construction and maintenance	Noise pollution which affects animals' ability to hunt and mate	Minimize time taken and level of noise involved in maintenance
Tidal, Current, Wave	Oscillating energy devices	Disturbance, injury, or entrapment of marine mammals, large fish, and diving birds	Avoid development in ecological hotspots; develop technology to slow or shut down turbines when large animal is nearby
Tidal, Current	Underwater tidal turbines	Disturbance, collision, and death of marine mammals, large fish, and diving birds	Avoid development in ecological hotspots; develop technology to slow or shut down turbines when large animal is nearby
Wind	Turbine blades	Disturbance, collision, and death of birds	Avoid development along important bird migratory routes
Tidal	Tidal stream turbine arrays	Alterations in sediment and seabed morphology	Run tests before deployment— most sites are likely to have minimal change
Tidal	Tidal range barrage construction	Large-scale estuarine habitat alteration and species displacement	Add tidal range technology to outlets that contain preexisting infrastructure
Current	Ocean current energy devices	Disturbance and impediment of migratory routes of species	Avoid development in sections of significant migration; Opt for a location or depth that minimizes species traffic
Wave	Wave Energy Converters	Alteration of physical processes of waves near shore— sediment transport, beach building, etc.	Run site-specific simulations to examine impacts prior to installing wave energy converters

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