Studies from University of Lisbon Provide New Data on Wind Farms (Macroeconomic Impact On the Risk Management of Offshore Wind Farms): Energy – Wind Farms

2023 SEP 19 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- Investigators publish new report on Energy - Wind Farms. According to news reporting originating in Lisbon, Portugal, by NewsRx journalists, research stated, “The present study aims to develop a risk model to analyse offshore wind projects based on operational and macroeconomic data. The study investigates the underlying parameters defining the project-specific risk premium attached to an offshore wind project.”

The news reporters obtained a quote from the research from the University of Lisbon, “These parameters are modelled as stochastic variables, and a probabilistic financial analysis is conducted using Monte Carlo Simulation. To calculate an interest rate based on operational characteristics, the present study assumes that two net present value equations yielding the same result can be written where certainty equivalent cash flows discounted at the risk-free rate and b) expected cash flows discounted at the cost of capital. The project-related risk is then estimated by solving the resulting equation for the unknown cost of capital. The macroeconomic factors are also considered as they impact the uncertainty associated with revenue and operating expenditure. The model developed to calculate the cost of capital is validated by comparing it with the data obtained for publicly traded renewable energy companies worldwide. Finally, the developed model is demonstrated for a fictitious ageing offshore wind farm under different economic circumstances.”

According to the news reporters, the research concluded: “The parametric study is conducted on the effect of critical project-specific parameters such as the number of offshore wind turbines, the life extension duration, and the degree of uncertainty related to cash flows.”

This research has been peer-reviewed.

For more information on this research see: Macroeconomic Impact On the Risk Management of Offshore Wind Farms. Ocean Engineering, 2023;284. Ocean Engineering can be contacted at: Pergamon-elsevier Science Ltd, The Boulevard, Langford Lane, Kidlington, Oxford OX5 1GB, England. (Elsevier - www.elsevier.com; Ocean Engineering - http://www.journals.elsevier.com/ocean-engineering/)

Our news correspondents report that additional information may be obtained by contacting Yordan Garbatov, University of Lisbon, Ctr Marine Technol & Ocean Engn Centec, Instituto Superior Tecnico, Lisbon, Portugal. Additional authors for this research include Baran Yeter, Feargal Brennan and Athanasios Kolios.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.oceaneng.2023.115224. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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