3Of course Ontario is not the only place with disappointing output from its WEGS.
The Muir report from the UK shows a 24% capacity factor for the UKsystem over the period November 2008 to December 2010 .
The New York State WEGS shows capacity factors of 19% for 2009 and23% for 2010 .
An analysis of the European WEGS shows that over the years 2003 to2007 the capacity factor of the EU15 56 GW system was 21% .It turns out that the Ontario system is not the only one to show a systematicdecrease in capacity factor with time. Over a 5-year period the Danish WEGSshowed an average 1.5%/annum decline in normalized annual average capacityfactor (see Appendix B).One obvious problem with many WEGS in Ontario is the high density of theturbines. In the words of Rolf Miller, Director of Wind Assessment at Chicago-based Acciona Windpower,
turbines are being “shoe
horned in” in Ontario .
The latest research from John Hopkins University recommends a separation ofturbines of 15 blade diameters to avoid wake loss  and hence loss of capacityfactor. For a modern 2.3 MW turbine this recommendation corresponds to adensity of about 0.5 turbine/km
. The Wolfe Island project, as an example,corresponds to 1 turbine/ km
, a high density which goes part way to explainingits poor performance. The effect of the high density is quite apparent: in modestwind speeds the down-wind turbines rotate more slowly than the up-windturbines! However, this is only one possible cause of poor performance anddoes not explain the decrease in normalized capacity factor with time.
Financial Viability of the Amherst Island ProjectA. Development Costs and Financial Carrying Costs
It is estimated that the cost of a WEGS development is at least $2.5 million/MW.We can expect investment banks to lend up to 80% of the capital cost at aninterest rate of 6% to 8% (current rates) over a 10-year term. The carrying costof the bank loan is $272,000 - $298,000/MW per annum. The model assumesthat the annual payments will be equal over the 10-year term. Analyses will bepresented for capacity factors of 20%, 25% and 30%. Judging from the datapresented in Fig. 1 the latter two look optimistic over a 10-year period.
B. Operations and Maintenance Costs
Estimating the cost of operations and maintenance (O & M) is difficult: there isvirtually no experience of operating industrial wind turbines beyond 10 years. Asa result, robust operational data remain relatively scarce. The InternationalEnergy Agency puts O & M costs in the range $10 to $30/MWh . A recentmajor report, the Wind Energy Operations and Maintenance Report, puts the costof operation and maintenance at US$27/MWh , at the top end of the IEAestimate. In addition, major maintenance has been found to be very expensive.