Transmission Alternatives for California North Coast Offshore Wind, Volume 4: Cost-Benefit Analysis Report

The purpose of this report is to compare the costs and benefits of installing offshore wind power plants with capacities up to 500 megawatts (MW) in the Humboldt Wind Energy Area offshore California, focusing on identifying the costs related to transmission upgrades and possible alternatives such as energy storage. We identify several options that result in lower costs than upgrading transmission to provide full deliverability. Our estimates of the levelized cost of energy (LCOE) assuming full deliverability range from $80/MWh for a 144-MW plant to $73/MWh for a 480-MW plant with a 2030 commercial operation date; however, the additional cost of transmission upgrades increases these values to between $86/MWh and $98/MWh. Based on curtailment and revenue estimates developed using a production cost model, the LCOEs for plant capacities of 144 MW and 168 MW with Energy Only deliverability are lower than the combined cost of energy and transmission upgrades for full deliverability. The addition of a 4-hour, 15-MW battery energy storage system increases revenue for both plant sizes, with the 144 MW + storage scenario producing the most revenue relative to LCOE.