*3.2. Estimates of the CAPEX Breakdown for the Mid-Term Project (TRL 2)*

As presented in Section 2 and shown in Figure 1, the expected breakdown of the CAPEX for a generic wave energy converter has been suggested, which gives a reasonable starting point for a low-TRL project where detailed information of all costs is not yet available. Based on the assumption at the mid-term project and TRL 2 of CAPEX at 4200 EUR/kW, the estimates for the different CAPEX cost centres can be inferred too. They are presented in Table 6.

**Table 6.** Breakdown of costs for the mid-term project (TRL 2), assuming a CAPEX value of 4200 EUR/kW targetting the LCOE of 200 EUR/MWh.


To exemplify the meaning of these numbers, Table 7 and Figure 2 provides a deeper insight into the cost centre labeled *Balance of plant*. With an allocated percentage contribution to CAPEX of 38%, the following estimates can be inferred for the different parts that compose it. These are the power take-off system, the foundation or support structure, the offshore electrical cables, the offshore substation and the onshore transmission and connection [26].

**Figure 2.** A breakdown of costs for the Balance of plant cost centre. The dark grey part represents the rest of the CAPEX.


**Table 7.** A breakdown of costs for the Balance of plant costs based on [26] at the mid-term project (TRL 2).

By looking into each of the categories depicted in Table 7, it is relevant to compare how the suggested numbers coming from the reverse calculation fall into the costs experienced by the wave energy sector. Ricci et al. [36] suggest that 600 EUR/kW for a linear generator PTO-type or 800 EUR/kW for a hydraulic PTO-type are reasonable estimates. Other studies [34,35] suggest that a unit cost of 340 EUR/kW can be used for the different PTO systems (mechanical, air, water and hydraulic) if series production is considered. Therefore, assuming a value around 600 EUR/kW seems to be reasonable.

The estimated costs for the foundation (590 EUR/kW) are also comparable with the costs presented in [30] for a monopile structure at 30 m water depth.

With regards to the costs of the electrical connections, they are in the same range as the ones presented in [32] for the inter-array electric cable, in [30,42] for the offshore substation and in [40] for the onshore transmission and connection.

It is important to note that the costs of an offshore electrical connection are very much project-specific and site-dependent. Denmark has traditionally financed the electrical connections for offshore wind energy projects. This fact has had an important impact on the final LCoE for offshore wind energy in Denmark compared to the one obtained in other countries, i.e., Great Britain, where developers shall self-finance the export infrastructure, and the difference of these on the final LCoE is estimated at 25% [54].

Overall, the example presented in this section has allowed drawing some estimates of the values and costs that will allow the LiftWEC concept to be competitive in the energy market. It is the primary goal that this economic exercise is done in combination and in collaboration with technological development, so every advancement in the concept's design decision is considering all the technological and economic aspects together. It is also important to note that the presented values may be read as orders of magnitudes rather than absolute figures, and therefore, the overall exercise is also found to be useful in helping to identify expected costs ranges for the different categories, elements or cost-centres that compose a WEC. Those values and the breakdown of costs are likely to change as the project evolves to higher TRL.
