Employing a DCF model, this paper scrutinizes how national regulations and geographic conditions of designated national offshore wind development areas affect profitability. The focus of the analysis is on a set of hypothetical offshore wind park scenarios from five countries (Belgium, Denmark, Germany, France, and the UK). The inclusion of geographic conditions is significant, since water depth and distance to shore influence costs and because available wind resources determine the amount of electricity produced.
The paper's findings are threefold: Firstly, profitability results indicate that currently relevant scenarios in the UK and Germany are most attractive, but that the upcoming UK Round III projects have low attractiveness. Belgium, France, and Denmark follow in the rankings successively. Secondly, there is high variation among scenarios with respect to capital costs¡ªdifferences amount up to +61 % . Lastly, a future scenario assuming technology improvements and learning effects suggests that remuneration levels could be lowered by ?5 % by 2020.