1. Substation foundation cost

Substation foundation cost in the HVAC transmission system is the total costs of each transformer substation capital expenditure, which is dependent on the infrastructure investment of the substation, expense of the transformer and the investment cost of auxiliary electrical equipment, including the reactive compensation capacitor and switchgear. Then the calculation of *Cstation* is based on cost *CperMVA* and determined by the capacity of substation *S*.

$$\mathcal{C}\_{station\,AC} = \mathcal{C}\_{per\,MVA} \cdot \mathcal{S} \tag{3}$$

2. Cable foundation and installation cost

The underwater cable for offshore wind energy is utilized for the link between the transformer substation and offshore substation; hence, *Ccable.AC* is estimated as a proportion of distance to station *L*.

$$\mathbb{C}\_{\text{cable}.AC} = \mathfrak{Z}(P\_1 + P\_2)L \tag{4}$$

where *P*<sup>1</sup> and *P*<sup>2</sup> are the expense and installation cost of one unit (length, km) of cable, respectively.

#### 3. Reactive power compensation foundation cost

In the HVAC transmission system, the distributed capacitance of the cable is generally much larger than the overhead line, so a large capacitance current will be generated in the AC line, which significantly reduces the available transfer capability. Therefore, reactive power compensation devices should be installed on sides of the cable according to the actual operation. Thus, compared with the VSC-HVDC transmission method, the foundation cost of the reactive power compensation should be considered additionally, which mainly includes the cost of the shunt reactors. To calculate it, the reactive power *Qreac* (MVAR) of the line capacitance is calculated.

$$Q\_{\text{reac}} = 2\pi \times f \times c \times l \times \mathcal{U}\_{\text{cable}}\,^2 \tag{5}$$

where *f* is the operational frequency of system, *c* is the capacitance value per km of the cable, and *Ucable* is the voltage of AC cable.

The capacity of reactors *Creacpc.AC* can be determined by

$$C\_{\text{reacpc.}AC} = P\_{\text{3}} \times Q\_{\text{renc}} \tag{6}$$

where *P*<sup>3</sup> is the expense of the reactors.
