Levelized capital costs of electricity generation in the U.S. 2028, by source

In the United States, new offshore wind power-generating sites entering the grid in 2028 had estimated capital costs of 89.61 U.S. dollars per megawatt-hour, as of 2022 calculations. Advanced nuclear plants had an estimated cost of 62.17 dollars per megawatt-hour. The more difficult the initial construction of a power plant, the higher the associated capital costs.

What are levelized capital costs?

The levelized cost of energy (or LCOE) is a comparative indication of the financial viability of different forms of energy over a system’s lifetime. Capital costs are the one-time expenses of acquiring the land, equipment, and construction resources to start a project. A decrease in the cost of renewable energy technologies over the past decades was an important factor in the rapid expansion of these technologies. For example, the cost of solar PV electricity worldwide declined by more than 88 percent between 2010 and 2021.

Harvesting wind from the sea

Despite the higher capital costs of building wind turbines in bodies of water, the high economic potential for fixed-bottom and floating offshore wind technologies is nevertheless predicted off the Atlantic coast, particularly in New England. While U.S. investors and politicians have been relatively skeptical towards the establishment of offshore wind farms in the past, the Biden administration strengthened the offshore wind energy sector. As of 2022, the offshore wind capacity pipeline in the U.S. stood at more than 40 gigawatts.