Abstract
Rapid deployment of offshore renewable energy and transmission infrastructure can be a major contributor to energy system decarbonization. However, regulatory obligations frequently impose deployment delays that are typically not quantified in cost terms. The costs of such delays should be incorporated in project and technology assessments. Here, a framework is developed that treats the development lag between project inception and operation as a temporal proxy for regulatory and related obligations, and propagates it through a levelized-cost-of-energy calculation to quantify the cost of delay. This framework is used to compare, on a common basis, conventional high-voltage cable transmission with offshore power-to-hydrogen (PtH) alternatives. The framework is applied to three strategies to move energy to shore from offshore wind facilities. The results show that for an example, one gigawatt plant, deploying one year sooner can save €110 million—a relevant metric to gauge the cost of policy designed to expedite deployment. In scenarios where the PtH can be deployed faster than high-voltage cables, the results suggest a limited decision space in which PtH transmission is cheaper, indicating that it will need to realize other benefits to compete with high-voltage cable transmission on cost. Profitability between electricity-based and hydrogen-based transmission is then compared, considering differences in deployment time. There are existing conditions of hydrogen and electricity prices that indicate PtH pathways may be more profitable when a difference in deployment lag is applied. In the example considered here, a lag difference can result in a greater number of exploratory price scenarios where PtH is more profitable. This framework is useful to quantify the implications of regulatory obligations and tune policies to accelerate low-carbon energy deployment.