No matter the source, offshore wind energy plant cost estimates are significantly higher than for land-based projects. For instance, a National Renewable Energy Laboratory (NREL) review on the 2010 cost of wind energy found baseline cost estimates for onshore wind energy systems to be 71 dollars per megawatt-hour ($/MWh), versus 225 $/MWh for offshore systems. There are many ways that innovation can be used to reduce the high costs of offshore wind energy. However, the use of such innovation impacts the cost of energy because of the highly coupled nature of the system. For example, the deployment of multimegawatt turbines can reduce the number of turbines, thereby reducing the operation and maintenance (O&M) costs associated with vessel acquisition and use. On the other hand, larger turbines may require more specialized vessels and infrastructure to perform the same operations, which could result in higher costs. To better understand the full impact of a design decision on offshore wind energy system performance and cost, a system analysis approach is needed. In 2011-2012, NREL began development of a wind energy systems engineering software tool to support offshore wind energy system analysis. The tool combines engineering and cost models to represent an entire offshore wind energy plant and to perform system cost sensitivity analysis and optimization. Initial results were collected by applying the tool to conduct a sensitivity analysis on a baseline offshore wind energy system using 5-MW and 6-MW NREL reference turbines. Results included information on rotor diameter, hub height, power rating, and maximum allowable tip speeds.