CAPEX Definition

Capital expenditures (CAPEX) are expenditures required to achieve commercial operation in a given year.

Based on EIA (2013), Moné et al. (2013 ), and Beiter et al. (2016 ), the System Cost Breakdown Structure of the ATB for the wind plant envelope is defined to include:

• Wind turbine supply
• Balance of system
  • Turbine installation, substructure supply and installation
  • Site preparation, port and staging area support for delivery, storage, handling, installation of underground utilities
  • Electrical infrastructure, such as transformers, switchgear, and electrical system connecting turbines to each other (array cable system costs) and to the cable landfall (export cable system costs)
  • Development and project management
• Financial costs
  • Owner's costs, such as development costs, preliminary feasibility and engineering studies, environmental studies and permitting, legal fees, insurance costs, and property taxes during construction
  • Interest during construction estimated based on three-year duration accumulated 40%/40%/20% at half year intervals and an 8% interest rate (ConFinFactor).

CAPEX can be determined for a plant in a specific geographic location as follows:

CAPEX = ConFinFactor*(OCC*CapRegMult+GCC), where GCC = OnSpurCost + OffSpurCost.

(See the Financial Definitions tab in the ATB data spreadsheet.)

Regional cost variations are not included in the ATB (CapRegMult = 1). In the ATB, the input value is overnight capital cost (OCC) and details to calculate interest during construction (ConFinFactor). Because transmission infrastructure between an offshore wind plant and the point at which a grid connection is made onshore is a significant component of the offshore wind plant cost, an offshore spur line cost (OffSpurCost) for each TRG is included in the CAPEX estimate. The offshore spur line cost reflects a capacity-weighted average of all potential wind plant areas within a TRG, similar to OCC.

In the ATB, CAPEX represents the capacity-weighted average values of all potential wind plant areas within a TRG and varies with water depth and distance from shore. Regional cost effects associated with labor rates, material costs, and other regional effects as defined by EIA (2013) expand the range of CAPEX. Unique land-based spur line costs for each of the 7,000 areas based on distance and transmission line costs expand the range of CAPEX even further. The following figure illustrates the ATB representative plants relative to the range of CAPEX including regional costs across the contiguous United States. The ATB representative plants are associated with a regional multiplier of 1.0.

Standard Scenarios Model Results

ATB CAPEX, O&M, and capacity factor assumptions for the Base Year and future projections through 2050 for High, Mid, and Low projections are used to develop the NREL Standard Scenarios using the ReEDS model. See ATB and Standard Scenarios.

CAPEX in the ATB does not represent regional variants (CapRegMult) associated with labor rates, material costs, etc., but the ReEDS model does include 134 regional multipliers (EIA 2013).

The ReEDS model determines offshore spur line and land-based spur line (GCC) uniquely for each of the 7,000 areas based on distance and transmission line cost.