How Can Wave Energy Achieve Cost Competitiveness with Wind, Solar, and Coal in the EU? An LCOE-Based Comparative Analysis

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bachelor_Minarini_Pauli_2025.pdf (1.52 MB)

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School of Business | Bachelor's thesis
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Date

2025

Department

Taloustieteen laitos

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Mcode

Degree programme

Bachelor’s programme in Economics

Language

en

Pages

42

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Abstract

This thesis investigates whether wave energy can achieve cost competitiveness with wind, solar, and coal in the European Union (EU) using the levelized cost of electricity (LCOE) as the central metric. While wind and solar have benefited from sharp cost reductions and now deliver electricity at €30-80/MWh, wave energy remains at pre-commercial stage with current LCOE estimates of €332-529/MWh. Nevertheless, its predictable output and complementarity with variable renewables make it a promising player in the EU’s energy mix. Baseline calculations for 2025 confirm that wave energy is not currently viable. However, scenario modelling for 2050 reveals that in a pessimistic scenario, costs fall to €219/MWh, while in an optimistic scenario, wave energy reaches €86.5/MWh, below coal and comparable to offshore wind. The analysis also considers value-based competitiveness and marginal pricing in the EU electricity market, showing that wave energy may displace fossil-based marginal producers even at higher LCOEs. The results suggest that future competitiveness depends on significant cost reductions, improved capacity factors, and strong policy interventions.

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Thesis advisor

Ozhegova, Alina

Keywords

LCOE, CAPEX, OPEX, capacity factor, discount rate, merit order, marginal cost pricing, EUPHEMIA

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https://urn.fi/URN:NBN:fi:aalto-202510268576

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[kand] Kauppakorkeakoulu / BIZ (Open Access)