can share costs or services with the wind farm if they are co-located, the resulting
avoided cost amounts to a private benefit accruing to the aquaculture operation.
This benefit can in practice be shared with the operators of the wind farm.
Permitting expenses and related legal costs arise from the need to conduct
studies of fish stocks, benthic resources, cultural resources, endangered species, and
other aspects of the proposed site before permits to construct and operate the wind
farm or aquaculture operation can be obtained. These studies tend to be site-specific
and generally amount to less than 5% of total project start-up and installation costs,
or less than 1% of total annualized project costs (Kite-Powell et al. 2003a, b).
If the aquaculture operation can make use of structures (moorings, pilings, etc.)
that are installed as part of the wind farm infrastructure (including marker buoys
demarking the boundaries of the exclusion zone around the wind farm), or of
site-to-shore power cables or data links, this implies reduced installation and
maintenance costs for the aquaculture operation. Like permitting costs, these typically represent less than 5% of total annual aquaculture project expenses (Jin et al.
2003; Kite-Powell et al. 2003a, b).
Logistics associated with maintaining the aquaculture infrastructure, bringing
seed/fingerlings and feed to the arm site, and transporting harvested product back to
shore, typically account for about 5% of the total annual operating cost of an ocean
aquaculture operation. The logistics needs of an aquaculture operation tend to be
much greater than those of a wind farm, but if the two can share logistics infrastructure and services, this may also represent cost savings on the order of 1% for the
aquaculture operation.
The effect on combined leased payments will depend heavily on the lease
payment structure imposed by the authorities responsible for permitting wind and
seafood farms in the area under consideration. It may be that lease payments are
assessed on the basis of output, in which case co-location may not produce any net
private savings. If combined lease payments are based strictly on the area occupied
by the two facilities, net savings may be achieved by co-locating.
In aggregate, the private cost savings potentially realized by the aquaculture
operation from co-locating with the wind farm amount to perhaps 5% of total
annualized installation and operating expenses. With cultured seafood farm production valued at $1000–$2000/ton, that is equivalent to about $50–100/ton of
production per year. As noted, these private benefits would likely be shared in some
fashion between the wind farm and the aquaculture operation, since both must
collaborate to realize these benefits.
10 Economics of Multi-use and Co-location
243
avoided cost amounts to a private benefit accruing to the aquaculture operation.
This benefit can in practice be shared with the operators of the wind farm.
Permitting expenses and related legal costs arise from the need to conduct
studies of fish stocks, benthic resources, cultural resources, endangered species, and
other aspects of the proposed site before permits to construct and operate the wind
farm or aquaculture operation can be obtained. These studies tend to be site-specific
and generally amount to less than 5% of total project start-up and installation costs,
or less than 1% of total annualized project costs (Kite-Powell et al. 2003a, b).
If the aquaculture operation can make use of structures (moorings, pilings, etc.)
that are installed as part of the wind farm infrastructure (including marker buoys
demarking the boundaries of the exclusion zone around the wind farm), or of
site-to-shore power cables or data links, this implies reduced installation and
maintenance costs for the aquaculture operation. Like permitting costs, these typically represent less than 5% of total annual aquaculture project expenses (Jin et al.
2003; Kite-Powell et al. 2003a, b).
Logistics associated with maintaining the aquaculture infrastructure, bringing
seed/fingerlings and feed to the arm site, and transporting harvested product back to
shore, typically account for about 5% of the total annual operating cost of an ocean
aquaculture operation. The logistics needs of an aquaculture operation tend to be
much greater than those of a wind farm, but if the two can share logistics infrastructure and services, this may also represent cost savings on the order of 1% for the
aquaculture operation.
The effect on combined leased payments will depend heavily on the lease
payment structure imposed by the authorities responsible for permitting wind and
seafood farms in the area under consideration. It may be that lease payments are
assessed on the basis of output, in which case co-location may not produce any net
private savings. If combined lease payments are based strictly on the area occupied
by the two facilities, net savings may be achieved by co-locating.
In aggregate, the private cost savings potentially realized by the aquaculture
operation from co-locating with the wind farm amount to perhaps 5% of total
annualized installation and operating expenses. With cultured seafood farm production valued at $1000–$2000/ton, that is equivalent to about $50–100/ton of
production per year. As noted, these private benefits would likely be shared in some
fashion between the wind farm and the aquaculture operation, since both must
collaborate to realize these benefits.
10 Economics of Multi-use and Co-location
243