CAPEX vs. LCoE: A quick dive into the complexity of offshore windfarm layout optimisaton using KLOC

by | Mar 13, 2025 | KLOC, Insight

Blog by Dr Jiaxin Zhang, Modelling and Optimisation Engineer at Kinewell.

Value estimators are widely used during planning process of offshore wind farm projects. CAPEX (Capital Expenditure) and LCoE (Levelised Cost of Energy) are two such frequently-used financial metrics that consider different aspects of the project. CAPEX focuses on the upfront financial investment and is useful for project budgeting. On the other hand, LCoE takes OPEX (Operational Expenditure), electrical losses and unavailability losses into account, making it suitable for forecasting long-term profitability and allows for comparison against other projects or energy sources.

In practice, the decision of using CAPEX or LCoE heavily depends on project-specific assumptions and goals. We will use examples to demonstrate the complexity of offshore wind farm layout optimisation, and why our flagship software solution KLOC has the flexibility to meet these challenges.

As offshore wind technology advances, wind farms are being planned with higher-power turbines, usually also increasing in their quantity of turbines. This poses additional challenges for inter-array cable design. To increase robustness and cut down on investment, it is desirable to use one standardised transformer design for the entire wind farm. Therefore, the electrical load needs to be evenly distributed among these transformers. One of the ways to quantify this “balancing of strings” problem is by distributing the number of turbines connected to each transformer as evenly as possible. Additionally, maintaining a balanced number of strings (groups of wind turbines that are connected through inter-array cables with the substation) for each transformer can also be vital for equal load sharing and to cut down installation complexity.

Transformer-level balancing of strings is incorporated into Kinewell Energy’s software solution KLOC. The users are given full freedom to specify whether they want to impose soft constraints towards balanced designs and how these constraints  impact CAPEX . Additionally, users are also able to consider OPEX, energy price and O&M costs to explore long-term project lifetime cost predictions. Having the ability to incorporate both short-term and long-term feedbacks of a feature such as “balancing of strings” provides a case-specific optimisation solution, keeping the users well-informed in decision-making and allowing them to save 20% of cable CAPEX over project lifetimes[1].

[1] https://kinewell.co.uk/kloc/

 

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