The European energy system is significantly changing to restrict the rise in global average warming. There is a shift from fossil fuels to renewable energy sources, which resulted in an exponential growth of offshore wind energy capacity in the North Sea. However, the North Sea is already one of the most intensively used sea basins in the world and space is limited. Offshore wind farms are therefore increasingly constructed under less favourable conditions. On the one hand the industry is rapidly developing and the cost of offshore wind energy goes down, but on the other hand offshore wind farms are constructed at greater water depths and further from shore. This latter development counteracts the cost reduction achieved by the industry, but countries are forced to construct offshore wind farms under less favourable conditions in order to achieve the climate agreements.

In June 2016, Dutch transmission system operator TenneT proposed the Hub and Spoke concept. It is an alternative method to connect offshore wind farms with the onshore grid and makes the parameter distance to shore far less important. Basically, the concept combines offshore wind farms with interconnector cables. An artificial island is created somewhere in the centre of the North Sea which is surrounded by offshore wind farms, thereby being far away from the crowded coastlines while profiting from near shore conditions. The interconnector cables subsequently transport the generated electricity to shore.

Dogger Bank is the envisioned location for the Hub and Spoke concept. The area contains strong winds, shallow water conditions and is centrally located. However, the unique characteristics of the shallow sandbank make it also very favourable to a variety of species. The area is therefore appointed Natura 2000 territory and could cause major resistance from environmental organisations. The general consensus amongst environmental organisations is not yet known, but industry experts indicate this as the major reason which could stop the Hub and Spoke concept from being realised on Dogger Bank.

The objective of this research is to determine the optimal location for the Hub and Spoke concept in the North Sea. The concept feasibility has never been determined and it is not even certain if Dogger Bank is the most beneficial location, while the location contains a very large risk. Therefore, the site selection model is created. The model contains input data from metocean conditions and electricity markets, which makes it possible to calculate the feasibility of the Hub and Spoke concept for every location in the North Sea. The result is a contour plot with the net present value of the Hub and Spoke concept, which shows the optimal location in the North Sea.

The Hub and Spoke concept is divided into five components to determine the influence of certain conditions on cost or revenue and to compare the components between each other. The artificial island and offshore wind turbines are primarily influenced by water depth, while the subsea interconnector cost is mainly influenced by the cable capacity and length of the cable. The optimal location for the island and offshore wind farms with respect to cost is thus along the shallow coastlines or at Dogger Bank, while the optimal location for the subsea interconnector cables is determined by the minimum total cable length. This point is equal to the centre of gravity of the countries surrounding the North Sea and is located just above the Netherlands and Germany.

In terms of revenue, the wind conditions are normative for the production and revenue of offshore wind farms and interconnectors derive their congestion rents from electricity price differences between countries. Offshore wind farms generate most electricity in the northeastern part of the North Sea where the wind conditions are strongest. This negatively impacts the generated revenue from subsea interconnectors as the cable is used more often for offshore wind energy. Interconnector revenue of the Hub and Spoke concept is therefore lowest at locations with the strongest wind speed, but in total the highest revenue is generated. A comparison between these components for four various locations is presented in Figure 1.

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Offshore wind farms are both in cost and revenue the major component in the Hub and Spoke concept. The optimal location is thus expected to be found in areas with shallow water depths and high wind speeds. Finally, each component with its cost and revenue has been determined and can be merged in the site selection model to determine the feasibility of the Hub and Spoke concept in the North Sea. See Figure 2.

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It can be concluded that the highest net present value for the Hub and Spoke concept is situated along the coastline of Denmark and Germany. However, these locations are known to be very crowded and the reason to investigate alternative locations in the first place. Dogger Bank and the northwest of Denmark are two very interesting alternatives. Dogger Bank is very shallow with depths of 10 m, while the northwest of Denmark is slightly deeper with 20 m but contains roughly 10% higher wind speeds. Both locations are primarily free from other marine uses, although Dogger Bank is protected Natura 2000 territory and therefore contains a very large risk. It is therefore advised to construct the Hub and Spoke concept at the northwest side of Denmark.