  One of the aims of the Low Frequency Array (LOFAR) Epoch of Reionization
(EoR) project is to measure the power spectrum of variations in the intensity
of redshifted 21-cm radiation from the EoR. The sensitivity with which this
power spectrum can be estimated depends on the level of thermal noise and
sample variance, and also on the systematic errors arising from the extraction
process, in particular from the subtraction of foreground contamination. We
model the extraction process using realistic simulations of the cosmological
signal, the foregrounds and noise, and so estimate the sensitivity of the LOFAR
EoR experiment to the redshifted 21-cm power spectrum. Detection of emission
from the EoR should be possible within 360 hours of observation with a single
station beam. Integrating for longer, and synthesizing multiple station beams
within the primary (tile) beam, then enables us to extract progressively more
accurate estimates of the power at a greater range of scales and redshifts. We
discuss different observational strategies which compromise between depth of
observation, sky coverage and frequency coverage. A plan in which lower
frequencies receive a larger fraction of the time appears to be promising. We
also study the nature of the bias which foreground fitting errors induce on the
inferred power spectrum, and discuss how to reduce and correct for this bias.
The angular and line-of-sight power spectra have different merits in this
respect, and we suggest considering them separately in the analysis of LOFAR
data.
