Search Climate Insights Directory

The SAVi analysis demonstrates that while a coal power plant appears more profitable under a Business-as-Usual (BAU) scenario, the offshore wind farm becomes the superior financial option when externalities and climate risks are integrated. Specifically, accounting for externalities reduces the levelized cost of electricity (LCOE) for offshore wind to EUR 65 per MWh compared to EUR 171 per MWh for coal. When physical risks (1.5°C temperature increase) and transitional risks (a carbon tax of EUR 16.27/MWh) are added, the coal plant's internal rate of return (IRR) drops to 0%, while the wind farm maintains an IRR of approximately 17%. The analysis also estimates that the offshore wind project would create 2,780 full-time equivalent jobs.