Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

Abstract: This paper investigates the optimal allocation of offshore wind farms along the Norwegian coast in light of the Norwegian Government’s objective to develop 30 GW of offshore wind capacity by 2040. Because wind power is inherently variable and expensive to store, we focus on maximizing base load production by identifying portfolios of wind farm locations that perform best in low-wind scenarios. Using wind speed data from the high-resolution NORA3-WP dataset for 20 candidate regions, we model marginal wind speed dynamics through seasonal ARMA processes and capture spatial dependence using a vine copula. This framework enables the simulation of 10 000 years of synthetic windspeed and corresponding power-output data. We then solve a constrained portfolio optimization problem that maximizes expected production in the lower 12% quantile of the joint power distribution, subject to sparsity constraints that limit development to five sites. The results show that spatial diversification can substantially stabilize base load wind power output. This paper thus adds to an existing quantitative foundation for offshore wind planning under production variability and spatial dependence.

Keywords: Offshore wind power; conditional value-at-risk; spatial diversification; energy system planning

JEL-codes: C15; C32; C61; Q40; Q48

Language: English

15 pages, April 28, 2026

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