The Economic Potential Value of Offshore Wind in the North of Portugal

Offshore wind energy is currently too expensive to compete with alternative energy sources. However, many floating offshore wind technologies, such as the demonstration project of Windfloat near Agucadora (Portugal), are being developed for three reasons: there are positive externalities associated with its deployment, capital costs in real prices are expected to decrease over time, and some offshore locations have favourable natural conditions for its deployment. Taking these three factors into account, we develop a dynamic model to assess the economic potential value of offshore wind energy at the Viana do Castelo study site located in the northwestern coast of Portugal. Our results indicate that, from a social perspective, an investment starting in a few decades in the Windfloat technology at Viana do Castelo has positive economic potential value. Therefore support schemes to promote its deployment may be fostered.