Simulator of Northeast Offshore Wind Buildout and LCOE (SNOWBaL)

The Northeast U.S. offshore wind landscape presents challenges and uncertainties impacting a wide range of questions, decisions and investments.

Conventional economic models are not designed to answer systemic questions impacted by dynamic interactions between development, procurement and investment decisions over time.

Big Questions Facing Northeast U.S. Offshore Wind Stakeholders

 

  • What factors make an offtake market most attractive to a developer with an offshore wind lease?
  • Which market presents the best opportunity for competing successfully, and where can’t I compete effectively?
  • What is a reasonable bid price benchmark to win an upcoming procurement opportunity, in the face of competition with different scale economies, winds, depth, distance, and interconnection circumstances?
  • How will competition among states for clean energy supply impact the landscape for near-term and long-term procurement opportunities?
  • How will transmission constraints and required network upgrades affect the competitive landscape?
  • How to optimize price and non-price factors to compete effectively in a procurement?
  • How would a proposed offshore network or onshore interconnection hub impact the competitive landscape?
  • How much can I justify bidding for a future offshore lease, considering offtake opportunities, costs, and the competitive landscape?
  • What offshore wind deployment outcomes should be expected in the face of interstate competition, transmission constraints and required network upgrades?
  • What transmission and interconnection configurations, deployed where and when, can maximize benefits and reduce procurement costs?
  • How could alternative transmission solutions facilitate offshore wind buildout and alleviate potential bottlenecks?

What is the value proposition of a proposed offshore network or onshore interconnection hub to states and offshore wind developers?

  • In the presence of interstate competition, what outcomes should be expected? How might the offshore wind industry develop over time?
  • What is the future trajectory of procurement PPA prices? How can policy, procurement scale, and timing decisions impact progress towards climate goals and ratepayer costs?
  • Will states need more lease areas to fulfill offshore wind targets and climate goals, and when?
  • How to optimize procurement schedules to navigate supply chain or interconnection constraints and leverage opportunities?
  • How could procurement requirements and design features affect states’ appeal to developers, bid prices (ratepayer impacts), and procurement outcomes?
  • How and when could supply chain investment and workforce programs best support buildout and alleviate potential bottlenecks?
  • What are the impacts of a proposed offshore network or onshore interconnection hub on project costs and bid prices?
  • What is a fair price for a negotiated offtake contract?
  • How to optimize procurement schedule to navigate constraints and leverage opportunities?
  • What would be the cost implications of deferring or accelerating procurement opportunities?
  • How would interstate competition impact resource potential scarcity and competitive landscape?
  • How would transmission constraints and required network upgrades affect procurement outcomes?
  • What are the impacts of a proposed offshore network or onshore interconnection hub on project costs and bid prices?

Answer Your Questions with SNOWBaL.

We at SEA love a good puzzle. We have developed the Simulator of Northeast Offshore Wind Buildout and LCOE (SNOWBaL) as a tool capable of analyzing offshore wind dynamics and interactions between key stakeholders over time, to provide strategic insight supporting better-informed action in the face of these critical questions.

By simulating offshore wind price and deployment outcomes across the range of existing and future lease areas, buyers, deployment scales, and points of delivery, taking into consideration interstate competition dynamics, deployment economy of scale, transmission and interconnection constraints and solutions, and development cost drivers and trajectories, SEA can use SNOWBaL to provide unique perspectives and insights to many of the Northeast U.S. offshore wind landscape’s challenging questions.

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How to Leverage SNOWBaL?

  • Leverage SEA’s analytical capability and extensive market knowledge: To provide insight to address your strategic questions, SEA can craft and conduct customized analysis, including (if desired) aligning with your key assumptions where appropriate.
  • License SNOWBaL to enhance your in-house analytical capability: You can license this user-friendly model to conduct your own analysis with your in-house data and assumptions to inform your decision making. SEA can provide user training and support, regular model update and maintenance, and custom model enhancement.

Use Cases

  • Offshore Wind Lease Area Valuation: SEA deployed SNOWBaL to forecast regional competitive procurement outcomes and pricing, considering both available existing lease areas and future lease areas, to support a private developer’s valuation of lease areas for an upcoming BOEM lease area auction.
  • Benchmarking Offshore Wind Offtake Pricing: SEA used SNOWBaL to model expected benchmark offshore wind offtake prices to support an offtaker in establishing and bounding pricing expectations for competitively PPAs and bilaterally-negotiated PPAs. See use case slide deck on how SEA performed the analysis (actual results are replaced with illustrative numbers).
  • Evaluating the Value Proposition of a New Point of Interconnection: SEA can use SNOWBaL to evaluate the value of offshore wind transmission solutions. See use case slide deck on a demo of how SEA can use SNOWbaL to evaluate the value proposition (measured by policy cost savings) of a new plug-in point for interconnection, where the costs of the new substation and associated system upgrades are socialized.

 

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