Risk Assessment of Offshore Wind Power Project Investment in the Grid-Parity Era: A Monte Carlo Simulation Approach
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Abstract
This study investigates the economic viability and investment risks of offshore wind power projects in the grid-parity era. As offshore wind generation increasingly relies on advanced electromagnetic energy conversion systems, intelligent grid infrastructures, and real-time communication networks for stable power transmission and operational monitoring, accurate investment risk evaluation has become essential for sustainable project development. A stochastic risk assessment framework based on Net Present Value-at-Risk (NPV-at-Risk) and Internal Rate of Return-at-Risk (IRR-at-Risk) is established and applied to grid-parity offshore wind projects using Monte Carlo simulation. The cumulative probability distributions of NPV and IRR are derived to quantify investment uncertainty, while grid-connected electricity volume, feed-in tariff, and construction investment are identified as the dominant sensitivity factors affecting project performance. Based on the simulation outcomes, targeted risk management strategies are proposed for governments, investors, and financial institutions to improve decision-making under uncertain market conditions. The proposed framework provides a practical methodology for evaluating offshore renewable energy investments and offers valuable guidance for intelligent power systems supported by electromagnetic information transmission and smart grid communication technologies.
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