Forecasting capital expenditures in early stages of an offshore wind power project is aproblematic process. The process can be affected by optimism bias and strategicmisrepresentation which may result in cost overruns. This thesis is a response to issuesregarding cost overruns in offshore wind power projects. The aim of this thesis is tocreate a cost forecasting method which can estimate the necessary capital budget in awind power project. The author presents a two-step model which both applies the inside view and outsideview. The inside view contains equations related to investment and installation costs.The outside view applies reference class forecasting in order to adjust the necessary costcontingency budget. The combined model will therefore forecast capital expenditures fora specific site and adjust the cost calculations with regard to previous similar projects. The results illustrate that the model is well correlated with normalized cost estimationsin other projects. A hypothetical 150MW offshore wind farm is estimated to costbetween 2.9 million €/MW and 3.5 million €/MW depending on the location of the windfarm.