Wind Farm Valuation in Turkey

7/29/2018 Wind Farm Valuation in Turkey
Wind Farm Valuation

11 November 2014 / in Energy Sector, General, Risk Modelling / by J. Andrew Howe, PhD
With the documented mankind-driven rise in greenhouse gases, power generation

has increasingly come under tight scrutiny. Burning fossil fuels such as natural gas
and coal emit these and other pollutants into the environment. Governments, utilities,
and investors have been focusing more on renewable non-polluting sources of
energy. These include dams, solar panels, biomass incinerators, and wind turbines.
The latter is the focus of this white paper.
Wind power is interesting because there is no dispatch capability. Either the wind is
blowing at a speed that a turbine can use to generate power, or it isn’t. In many
regions, the peak power generated by a wind turbine does not overlap with peak
demand – when it would be needed most. E ective use of wind power is limited by
two broad issues:
Due to its intermittency and non-dispatchability wind power can not be

counted on to meet demand like most other sources. We say that wind power
has a low capacity factor. Adding 1,000 MW of wind nameplate capacity may
only result in total capacity of 200 MW to meet demand. Hence, if a system’s
forecast capacity is 1,000 MW lower than peak demand, this can not be met by
investing in 1,000 MW of wind power.
Wind farms are expensive. One recent estimate is that a wind farm can cost
more than 950,000 Euros per MW nameplate capacity. In contrast, a natural
gas CC/CT generator can cost as low as 600 USD per kW. Because of the large
investment, operators typically need the turbines to generate revenue
whenever the wind is blowing, so as to recoup their investment and make a
pro t – whether or not the electric grid needs the power at the time. Wind
power operators typically sell their power using take-or-pay contracts, which
requires the buyer to pay even if the power is not needed.
https://riskdynamicsconsultancy.com/wind-farm-valuation/?lang=en 1/16
In many areas, due to these issues, wind

power is not an economically viable
investment option. Yet, it is arguably one
of the cleanest and least detrimental
power generation technologies. Hence,
some governments guarantee power
prices with take-or-pay contracts to
encourage investment in wind farms. The
government of the Republic of Turkey is
one of them, guaranteeing prices for
qualifying wind farms for 73 USD/MWh
for 10 years.
Turbine Valuation Model

In this white paper, we show how a wind turbine power generator can be
stochastically modeled and valued by Monte Carlo simulation using Microsoft Excel
and Palisade’s @RISK. Our model begins with the power generation and maintenance
characteristics of the turbine. Next, an appropriate probability distribution for
average daily wind speeds is estimated from historical meteorological data. Total
daily power output is then computed by simulation from this distribution, crossed
with the turbine power curve. We use a separate simulation model for average daily
power price in the Turkish day-ahead electricity market to simulate revenue. Our
model simulates a single turbine running by day over 10 years, and computes
statistics around the project IRR for various stress scenarios. Furthermore, we discuss
how the model can easily be extended to an entire wind farm. Finally, we suggest
how it could guide the Turkish Ministry of Energy and Natural Resources in wind-
power related decisions.
So as to balance the need for realistic variability and computational tractability, our
model is based on average daily wind speeds and power prices. Monthly speeds /
prices would be much simpler, but the underlying uncertainty would be
underestimated. For each random variable series modeled, there are hence 3,650
simulated values.
Generally, an investor would install multiple wind turbines in the same location to
form a wind farm. Independently, each turbine would be expected to operate under
similar wind conditions. However, due to shadowing and wake e ects, turbines can
interfere with each other, and reduce the total power output. For this demonstrative
white paper, we model a single independent turbine. This could be extended to a
wind farm of n turbines in three ways:
Model the total revenue in each year as:
where R is the revenue from our modeled turbine, and Fi is the shadowing & wake
reduction factor for the Ith turbine.
Based on the same simulated wind speeds, model each turbines power output
jointly using the Fi factor.
Model the wind experienced by – and hence power & revenue from – each turbine
separately. This would be prohibitively complex, as wind speeds need to be
correlated from both day-to-day and turbine-to-turbine.
We will discuss the model in four parts: The Turbine, Electric Power Prices, Wind Input
& Power Output, and Overall Valuation.
The Turbine
The graphic on the right shows, at a high
level, how a wind turbine works.
1. Wind causes blades to rotate.
2. Shaft turns generator to produce

electrical energy.
3. Transformer converts it to high

voltage.
4. Electricity transmitted via power grid.
One of the largest wind turbine manufacturers is VESTAS, and we model a VESTAS
model V126 with maximum 3,300 kW nameplate. The magazine “Wind Power
Monthly” estimates VESTAS turbine investment costs at 967,742 EUR/MW
[http://www.windpowermonthly.com/article/1228426/unmasking-turbine-prices] .
Hence, we model the investment cost at 9,261,291 TL, using a 2.90 TL to EUR
exchange rate. We assume an operational life of 10 years, with salvage / reclamation
costs of 5% of the investment in the nal year. Annual operations & maintenance
(O&M) costs are estimated to begin at 1.5% of the initial investment, and uniformly
increase each year until 2% in the 10th year.
The amount of power generated by a wind turbine is proportional to how fast wind is
blowing, generally exhibiting a gradually increasing curve, a plateau, then a
precipitous drop as cut-outs engage to protect the generator.
This is shown for the VESTAS V126 in the

power output curve to the left. Wind
slower than 2.5 m/s does not blow
enough to rotate the turbine blades. As
wind speed increases up to about 12 m/s,
the blades spin faster and electricity
generated gradually increases from 0 kW
to 3.3 MW. The optimal range of wind
speeds is 12.0 m/s to 19.5 m/s; in this range, power output is a steady 3.3 MW. If the
wind becomes more blustery, the generator decelerates at a rate of generating 1.1
MW less per m/s wind speed. The generator cuts out entirely for wind at 22.5 m/s. The
power outputs shown in the power curve are nameplates; there are several reasons
and causes for electricity generated to be lower than shown here. Broadly, less power
is realized due to a) losses and b) outages.
We model three sources of power losses. First, we assume that power output drops
by 0.5% gradually over the turbine life, due to wear and tear of the mechanical
components. Secondly, we use a standard loss rate of 2% in the step-up transformer
which increases the voltage for long-distance transmission. Thirdly, we include the
standard loss of 1% in long-distance transmission from the wind farm into the power
grid. In each year, the power curves are reduced according to the table below.
Year Degradation Transform Transmission
1 99.95% 97.95% 96.97%
2 99.90% 97.90% 96.92%
3 99.85% 97.85% 96.87%
4 99.80% 97.80% 96.83%
5 99.75% 97.76% 96.78%
6 99.70% 97.71% 96.73%
7 99.65% 97.66% 96.68%
8 99.60% 97.61% 96.63%
9 99.55% 97.56% 96.58%
10 99.50% 97.51% 96.54%
In addition to these power losses, we must model both planned and unplanned
outages. All power generators must undergo periodic maintenance and repair, for
which they are taken o ine. We model planned outages stochastically based on an
assumption that, in each year, we can have between 1 and 3 days of planned outages.
This is simulated by a Triangular distribution with most likely value of 2 days. Each day
then has a probability p of no power generation due to being on a planned outage,
where (y indexes the years)
This is very easy to do with @RISK in Excel. First we have a table named outage_p
wherein, for each year, we simulate the number of days that should be on planned
outage: RiskTriang(1,2,3). On each day, we then simulate the planned outage using
RiskBernoulli(VLOOKUP(C2,outage_p,2,FALSE)/365), where C2 is the year. This is
essentially ipping an extremely uneven coin. On the rare day that it occurs (at most
3/365), we model no power output.
In addition to the planned outages, we model unplanned outages for days when
something fails so as to prevent electricity generation. For the rst year, we assume
technical availability of 96%, and 97% for the other 9 years. This is an average failure
rate of 3.10% over the life of the turbine; using the exponential transformation (y
indexes the years)
we get loss rates for each year as shown in the 3rd column of the table below. The
number of days on unplanned outages are then simulated using a Poission
distribution, which is typically used to model occurrence frequencies for relatively rare
independent events. The average rate for the Poisson is taken as Ly×365; it is easily
modeled with @RISK as RiskPoisson(CEILING(N3*365,1)). This is the 4th column of the

table below, currently showing the average number of days on unplanned outage.
Year Availability Loss Days
1 96% 3.32% 13
2 97% 3.56% 13
3 97% 3.82% 14
4 97% 4.09% 15
5 97% 4.38% 17
6 97% 4.70% 18
7 97% 5.04% 19
8 97% 5.40% 20
9 97% 5.78% 22
10 97% 6.20% 23
We allow each outage to last for three days, and model their starts with another
Bernoulli random variable.
When the wind is blowing more powerfully, the turbine is stressed more, so
unplanned outages should be more likely to occur in these situations. Hence, we
simulate the outages as being correlated with the simulated wind speeds (ρ = 90%
correlation,); for this, we use the formula
RiskBernoulli(VLOOKUP(C2,outage_u,5,FALSE)/365,RiskDepC(B2,rho)). In this formula,
C2 is the year, outage_u is the table above, B2 is a cell name, and rho is the
correlation.
Electricity Prices
We simulate 10 years of daily average electricity spot prices using a modi ed version
of the model discussed in a previous white paper
[https://riskdynamicsconsultancy.com/power-price-risk-model/?lang=en] . The prices
are simulated using a Geometric Brownian Motion model with Mean Reversion and
Jump Di usion (GBMMRJD), and is shown here
From the previous white paper, we made only slight updates to the model. A sample
one-year price curve simulated from this model is shown below in red, along with the
most likely 50% and 90% intervals. The green curve is the actual average daily prices
for the rst half of 2014.
This GBMMRJD process is extended for 10 full years.
These prices are used to compute the revenue for the electricity generated each day,
except when the power price falls below the guaranteed oor of $73.00/MWh. At the
approximately current exchange rate of 2.26 TL/USD, this comes to a minimum price
of 164.98 TL/MWh.
Wind Input & Power Output

Everything we’ve seen thus far is dependent upon simulated wind speeds, which is the
nal input.
Wind speeds are frequently modeled using a Weibull distribution. A unique

characteristic of this distribution is that it has a shape parameter that allows it to
model events that decrease in likelihood, stay constant, or increase in likelihood. The
Weibull has two parameters which control the range and shape of the probability
distribution, which can we estimated from historical data.
In order to ensure the estimated parameters are su ciently accurate, data from two
sources needs to be evaluated: a) long-term meteorological stations, and b) site-
speci c studies. A few important sources of long term regional wind condition data
include:
Reanalysis data from the Modern Era Retrospective-analysis for Research and
Applications (MERRA), developed to support climate-related research of NASA, is
available since 1979 across the globe. Meteorological variables are provided in
hourly increments and spatial resolution of 1/2 degrees latitude and 2/3 degrees
longitude.
The World Wind Atlas consists of reanalysis data on wind conditions globally in a
2.5 square grids since 1950 in six-hour increments. This data was compiled by
NCAR and NCEP.
A third reanalysis data source is a meso-scale resolution dataset covering Europe,

and distributed by EMD. The hourly data is available in 3 km × 3 km grids since the
early 1990’s.
In addition to these data resources, long-term weather data is available from

meteorological stations across Turkey. General practice for wind measurement in a
region is to measure wind conditions for a year or more in the speci c region and
then compare these measurements in the region with the historical data from
di erent resources. The correlation between the measurements in the speci c region
and the historical resource is calculated. The resource with the highest correlation can
be used to model the long-term wind speed characteristics of the region considered
for the wind farm investment.
Based on data sources such as these, in our white paper we model daily average wind
speed using the Weibull with parameters α = 2.0 and β = 8.5. The value of 2.0 for the α
shape parameter means that higher wind

speeds will be observed with increasing
probability until a maximum, from which
point, higher wind speeds will become
less frequent. The gure to the right
demonstrates this shape.
Common sense tells us that wind speed

does not generally change dramatically from one day to the next. If wind is blowing at
5 m/s one day, the next day it will probably not be 20 m/s. To realistically model this
autocorrelation, the wind speed is simulated each day such that it is 90% correlated
with the previous day. We do this with the @RISK function
RiskWeibull(alpha,beta,RiskUnits(“m/s”),RiskName(B3),RiskIndepC(B2),RiskDepC(B3,rho)),
where alpha and beta are the Weibull parameters, rho is the correlation, B3 is the cell
name for this simulated day, and B2 is the same for the previous day.
Overall Valuation
In summary, the following values are simulated and calculations are made for each
simulated day (out of 3,650):
1. Average daily wind speed is simulated from the Weibull distribution using the
indicated parameters, and correlated to the previous day.
2. The start of an unplanned outage is simulated from the Bernoulli distribution

unless the turbine is already in an unplanned outage.
3. A planned outage is simulated from the Bernoulli distribution.
4. If there is no outage, the simulated wind speed is located in the power curve, and
the identi ed amount of electricity is multiplied by 24 to generate a full day of
power in MWh.
5. The simulated power generated is scaled back to account for the losses described
above, by looking up the year-speci c loss factor.
6. The electricity generated is valued at the average daily price simulated by the
GBMMRJD model, unless it is below 164.98 TL/MWh, in which case the oor price
is used.
For each of ten years, we sum the daily simulated power (in MWh) and daily revenues
(in TL). We also compute the average realized price (TL/MWh) and outages (days) in
each year. These outputs are shown in the table below for a sample iteration.
Year Power (MWh) Revenue (TL) Price (TL/MWh) Outages (days)
1 11,932 2,047,699 171.62 8
2 11,392 1,907,361 167.42 16
3 11,804 2,002,891 169.68 17
4 11,579 1,967,286 169.90 5
5 11,982 2,008,696 167.64 11
6 11,885 1,997,340 168.06 10
7 10,425 1,753,981 168.24 37
8 12,320 2,071,873 168.18 13
9 11,746 1,999,988 170.26 24
10 12,319 2,084,256 169.19 20
Total 117,384 19,841,371 169.03 161
Finally, a Pro t & Loss statement – detailing the investment costs, O&M expenses, and
revenues in each year – is made, and the IRR for the entire project is calculated. This is
shown below for the same sample iteration.
Year Investments O&M Income Pro t
0 -9,261,291 0 0 -9,261,291
1 -138,919 2,047,699 1,908,779
2 -144,065 1,907,361 1,763,296
3 -149,210 2,002,891 1,853,681
4 -154,355 1,967,286 1,812,931
5 -159,500 2,008,696 1,849,196
6 -164,645 1,997,340 1,832,695
7 -169,790 1,753,981 1,584,191
8 -174,935 2,071,873 1,896,938
9 -180,081 1,999,988 1,819,907
10 -463,065 -185,226 2,084,256 1,435,966
IRR 14.4%
Application of the Wind Turbine Valuation

Model
We ran this valuation model for 1,000 iterations, which required approximately 4
minutes (over 20,000 simulated inputs!). With the above-detailed parameters and
inputs, the empirical distribution for the overall project IRR is shown below. If an
investor, evaluating the project to install a wind turbine and sell power to the Turkish
energy grid, had a Minimum Acceptable Rate of Return (MARR
[http://en.wikipedia.org/wiki/Minimum_acceptable_rate_of_return] ) of 14.0%, we see
that there would be a 47.5% chance of not making this return or better on the project.
As a brief side note, observe that our model provides much more information than
typical IRR analysis. Generally, management will be given an expected IRR by which to
make an investment decision. The result of our Monte Carlo simulation model,
however, is an entire distribution for the IRR. Management can see, for example, that
there is 90% certainty that the IRR will be between 13.1% and 14.9%.
We see below that both power generation and revenue decreases gradually over time
at essentially the same rate. This decrease is due to component degradation and
increased frequency of outages.
Furthermore, we see in the above curves that the uncertainty in power generation
stayed mostly constant. Since the GBMMRJD electricity price model assumes constant
variance, the uncertainty in revenues also stayed constant.
In building this model, we made several assumptions that could have a material
impact on the results. From this base case, we can stress test the project IRR easily by
allowing some of these assumptions to change and rerunning the model under
di erent scenarios. We adjusted eight of the assumed input values and ran ve stress
scenarios with the parameters as shown in the table here.
Bias Red. Degradation Salvage PO PO PO O&M O&M

Factor Min Mode Max From To
1 100% 0.50% 5% 1 2 3 1.50% 2.0%
2 95% 0.50% 5% 1 2 3 1.50% 2.0%
3 100% 2.00% 5% 1 2 3 1.50% 2.0%
4 100% 0.50% 10% 1 2 3 1.50% 2.0%
5 100% 0.50% 5% 3 5 7 1.50% 2.0%
6 100% 0.50% 5% 1 2 3 3.0% 5.0%
The values in red typeface are the stressed assumed values. Each scenario evaluates
stressing an input assumption independently of all others as detailed here:
1. The rst row is the base case for which we have already reported results.
2. In the second scenario, we apply a reduction factor of 5% to daily power

generation. We do this to evaluate the result of any possible biases towards more
optimal wind speeds or a stronger power curve.
3. Remember we assumed that wear and tear of the generator components in the
turbine resulted in a uniformly gradual loss of 0.5% over the 10 years. In this
scenario, we quadruple the degradation loss to 2%.
4. For the fourth scenario, we assume that salvage & reclamation investments in the
10th year amount to 10% of the initial investment, or 926,129 TL.
5. We stress the planned outages in the 5th scenario, more than doubling the
frequency of planned outages.
6. In the base case, we assumed annual operations & maintenance expenses

started at 1.5% of the investment amount, and gradually increased each year to
2% in year 10. We stress this to range from 3% to 5% in the nal scenario.
@RISK makes it easy to run simulations for many scenarios and compare the results.
To modify our model for the scenario modeling, we rst de ned a function
RiskSimtable(H3:H8), with H3:H8 referring to the rst column of the scenario table. In
the relevant input cells, we replaced hardcoded values with simple vlookups, such as
VLOOKUP(scenario_number,scenarios,10,FALSE), where scenario_number is the cell
with the RiskSimtable function, and scenarios is the scenario table. Running all seven
scenarios (including the base case) for 1,000

iterations required about 25 minutes!
The plot below shows cumulative distribution

curves for all six scenarios. The vertical line at 14.0%
and horizontal bars at the top show the probability
of the project meeting the MARR.
We can summarize all six scenarios with the following statistics.
Mean 90% Con dence Interval P(IRR < MARR)
Base Case 14.0% (13.1%, 14.9%) 47.5%
Scenario #2 12.6% (11.7%, 13.4%) 99.7%
Scenario #3 13.8% (12.9%, 14.7%) 61.7%
Scenario #4 13.7% (12.7%, 14.6%) 73.3%
Scenario #5 13.8% (12.9%, 14.7%) 65.4%
Scenario #6 11.0% (10.1%, 12.0%) 100.0%
From the cumulative curves and the summary table, we see that we should be most
concerned, due to their impact on meeting the MARR, about our assumptions related
to operational expenses and power generation.
O&M expense estimates: Increasing the O&M expenses as we did makes it virtually
impossible for the project to meet the minimum return. The base case of 1.5%
increasing up to 2.0% maintenance would have probably come from VESTAS. This
result suggests it would be important to research these numbers more thoroughly,
perhaps by identifying best practices from other manufactures and turbine operators.
Wind speed estimates / power curve reported by VESTAS: If the amount of power
generated by the turbine is decreased by only 5%, the project drops from a 52.5% to a
mere 0.3% chance of meeting the minimum return. The shape of the wind speed
distribution and turbine power curve has the largest impact on total power generated.
The power curve reported by VESTAS was probably generated in a test chamber
under ideal conditions, so may be somewhat suspect. More information from the
manufacturer should be obtained about this. Regarding wind speeds, these were
estimated from historical meteorological data. More certainty could be obtained, if
desired, with a directed study of wind at the evaluated location, and speci cally
considering the planned height for the turbines. Temperature conditions could also
be evaluated, as icing of the rotor blades can further decrease power output.
Conclusion
In this white paper we have discussed and brie y demonstrated how a stochastic
valuation model for a wind power project can be implemented using Microsoft Excel
and Palisade’s @RISK. There are a lot of “moving parts” in the entire project, so there
are very many inputs. Some of the assumptions are known as standards in the
industry, some came from market research, others from the turbine manufacturer,
and we also made some guesses. Broadly, they could all be classi ed as
characteristics of electricity generation / transmission equipment, local weather, the
power market, and the economy.
Note that we have converted all investments, expenses, and revenues to the common
currency of Turkish Lira. The turbine would be purchased by paying Euros, revenues
would be paid in both Turkish Lira and US dollars (in the case of the oor), and
everything else would probably use Turkish Lira. The more proper way to handle this
would be to model the currency exchange. We opted not to do this, as it is a very
complex problem and it would detract from the focus of the white paper – valuing
wind power electricity generation.
Our results suggest that, by guaranteeing a oor price of $73/MWh, the Turkish
government could expect to incur a loss between TRY 2.1M and 2.4M in 10 years by
subsidizing this wind power investment of a single 3.3 MW turbine. An investment in a
full wind farm would result in order-of-magnitude higher losses by the government.
This loss is an incentive for the wind turbine investor, and the investment decision
only becomes favorable because of this oor price. According to our model, the price
oor of $73/MWh is crucial to the project meeting the minimum acceptable rate of
return of 14.0%; with no price oor, P(IRR<MARR) = 100%, and mean IRR is 10.6%. We
believe a 14% expected IRR for an investment which has neither FX risk nor power
price risk (because the oor price is denominated in USD) would be over-subsidized in
Europe or US, which suggests the oor is too high. Furthermore, the determination
methodology of the oor price can be questioned. Why is it $73 and not $70 or $75?
While we don’t demonstrate it here, the question suggests another potential use for
our valuation model; the Turkish Ministry of Energy and Natural Resources could use
it to guide determination of the oor. We could set a reasonable allowed return rate
in the model, and use optimization to nd the oor price that would set the mean IRR
to the allowed amount. Due to the stochastic nature of the Monte Carlo simulation
model, this would be di cult to do with most software packages; however, it is easy
to do with the RiskOptimizer tool in @RISK.
A nal important point to note is that if there was an e cient carbon certi cate
market in Turkey, the government wouldn’t need to incur any loss for incentivising
investment in wind power generation. Wind turbine operators would receive carbon
certi cates when they produce electricity and could sell them in the carbon certi cate
market to the buyers who need them for their carbon emissions.
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Wind Farm Valuation in Turkey

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7/29/2018 Wind Farm Valuation in Turkey

Wind Farm Valuation

With the documented mankind-driven rise in greenhouse gases, power generation

Due to its intermittency and non-dispatchability wind power can not be

In many areas, due to these issues, wind

Turbine Valuation Model

Model the total revenue in each year as:

reduction factor for the Ith turbine.

1. Wind causes blades to rotate.

2. Shaft turns generator to produce

3. Transformer converts it to high

4. Electricity transmitted via power grid.

This is shown for the VESTAS V126 in the

Year Degradation Transform Transmission

1 99.95% 97.95% 96.97%

2 99.90% 97.90% 96.92%

3 99.85% 97.85% 96.87%

4 99.80% 97.80% 96.83%

5 99.75% 97.76% 96.78%

6 99.70% 97.71% 96.73%

7 99.65% 97.66% 96.68%

8 99.60% 97.61% 96.63%

9 99.55% 97.56% 96.58%

10 99.50% 97.51% 96.54%

modeled with @RISK as RiskPoisson(CEILING(N3*365,1)). This is the 4th column of the

Year Availability Loss Days

This GBMMRJD process is extended for 10 full years.

Wind Input & Power Output

Wind speeds are frequently modeled using a Weibull distribution. A unique

A third reanalysis data source is a meso-scale resolution dataset covering Europe,

In addition to these data resources, long-term weather data is available from

shape parameter means that higher wind

Common sense tells us that wind speed

2. The start of an unplanned outage is simulated from the Bernoulli distribution

3. A planned outage is simulated from the Bernoulli distribution.

Year Power (MWh) Revenue (TL) Price (TL/MWh) Outages (days)

1 11,932 2,047,699 171.62 8

2 11,392 1,907,361 167.42 16

3 11,804 2,002,891 169.68 17

4 11,579 1,967,286 169.90 5

5 11,982 2,008,696 167.64 11

6 11,885 1,997,340 168.06 10

7 10,425 1,753,981 168.24 37

8 12,320 2,071,873 168.18 13

9 11,746 1,999,988 170.26 24

10 12,319 2,084,256 169.19 20

Total 117,384 19,841,371 169.03 161

Year Investments O&M Income Pro t

1 -138,919 2,047,699 1,908,779

2 -144,065 1,907,361 1,763,296

3 -149,210 2,002,891 1,853,681

4 -154,355 1,967,286 1,812,931

5 -159,500 2,008,696 1,849,196

6 -164,645 1,997,340 1,832,695

7 -169,790 1,753,981 1,584,191

8 -174,935 2,071,873 1,896,938

9 -180,081 1,999,988 1,819,907

10 -463,065 -185,226 2,084,256 1,435,966

Application of the Wind Turbine Valuation

Bias Red. Degradation Salvage PO PO PO O&M O&M

1 100% 0.50% 5% 1 2 3 1.50% 2.0%

2 95% 0.50% 5% 1 2 3 1.50% 2.0%

3 100% 2.00% 5% 1 2 3 1.50% 2.0%

4 100% 0.50% 10% 1 2 3 1.50% 2.0%