Cost Analysis of Wind Power

Wind Power system is analyzed for its Life Cycle Cost. It means that we calculated the time taken by the
wind power generation system to pay back its installation and production cost. Electricity generated by
the Power system is sold to the Grid supply and the monetary gains by selling are used for paying back
the original cost of the system after deducting the annual maintenance and other miscellaneous charges.

It is to be kept in mind that selling price of wind electricity is varying in varying countries. In India it has
been recently changed from a low Rs 3.5/kWhr to Rs.10/kWhr. Various incentives are also given to Wind
energy projects as discussed before. So in this study we calculate the estimated amount of electricity
production and the resultant revenue generated by that.

Both 3.5 and 10 have been considered while calculating the cost payback time. And since incentives have
not been taken in account during the calculations, the resultant is actually a little more than the exact
value. Retscreen has been used to analyze and calculate the result.

Big generating system 30kW and above have an approximate cost of Rs 148,500/kWh. Hence total cost
of this setup comes out to be approximately Rs 45 lakhs.

Results from the study after data analysis from RETSCREEN are shown as below
In this study we have assumed the following parameters

Plant life : 25 years with inflation rate as 10% and debt ratio as 0%.

Operation and maintenance cost is taken as 5% of the total initial investment cost.
For the rates at Rs 3.5/kWhr, we get a cost payback time of 21 years, while the same is 6.5 yrs for the
rates of Rs10/kWhr. The payback time has been calculated at a capacity of 35% which can vary from 25-
40% for a wind turbine.

But these values can decrease considerably in practical because of the various incentive schemes given to
the Wind energy projects by the government of India.

In comparison to Wind, solar systems had a lower cost payback time of 17 yrs (ASR-128) and 14 yrs (KC
120) till the time rates were Rs 3.5/kWhr for the Wind electricity. Although with the newer rates of wind
electricity, payback time will decrease significantly in Wind thus making it more profitable and cost
effective to install a new wind power plant.