Offshore wind farms offer slim profits barely above costs, making them unattractive investments for developers.

Question

Scottish nationalists, beware: offshore wind farms aren't cash cows. Profits are barely above costs, so developers might see them as bad investments.

Answer 1

Wind farms are not cash cows?

Fact-checked? False.

According to Lumify Energy, the ROI on a wind farm isn't an exact science, as it depends on the initial investment and number of turbines you have. But according to Octopus Energy, the ROI can be around 7.5-8% at the ready-to-build stage. Once the turbines are fully operational and the initial investment is paid back, this can increase. It is worth noting that there's a lot of literature online about this topic -- some backed by those tied to oil interests -- so there's differing views on whether wind turbines are profitable. Overall, it appears that wind farms can be considered as "cash cows" given that phrase is defined as a business, product, or asset that, once acquired and paid off, will produce consistent cash flows over its lifespan.

https://lumifyenergy.com/blog/are-wind-farms-worth-it/#:~:text=The%20ROI%20on%20a%20wind,paid%20back%2C%20this%20can%20increase.

https://www.investopedia.com/terms/c/cashcow.asp

https://windexchange.energy.gov/projects/economics

https://www.adamsbrowncpa.com/blog/the-next-potential-cash-stream-blowing-through-arkansas/

https://www.woodmac.com/news/opinion/wind-industry-faces-a-perfect-storm-of-profit-pressures/

https://todayshomeowner.com/eco-friendly/guides/how-long-does-it-take-a-wind-turbine-to-pay-for-itself/

https://weatherguardwind.com/how-much-does-wind-turbine-cost-worth-it/

Answer 2

The Cost of Energy for offshore wind has dropped significantly.

• According to BloombergNEF (2023), the LCOE for offshore wind fell by 72% between 2010 and 2022 due to advancements in turbine efficiency and economies of scale. therefore proving there effeicancy over time and therfore disproving this question of there usefulness.The International Renewable Energy Agency (2022) reported that offshore wind LCOE is now competitive with fossil fuels in many regions,which goes to show these efforts are rewarding.