Economics of wind energy

The cost of wind farms

Tom Cronin
Learning objectives

After this lecture you will be able to:

•Name the four phases of a typical wind farm timeline

•List five of the major components of the cost of a wind farm

•Describe the economic profile of a wind farm project

The wind farm project timeline

Development Implementation Operation Decommissioning

•Finding a site •Procurement •Operation •Remove

•Site characteristics •Construction •Maintenance or
•Wind farm design •Re-power
•Permissions & licences
•Financing
•Public engagement

Up to 10 years 1-2 yrs 20 – 25 years <1 yr

Components of the cost
Development
Site assessment
Wind resource 5-10 €c
A per kWh
Permissions & licences
Preliminary design
Legal & contracts
Environmental study
Calculation of the
50MW economics of a Decommissioning
onshore wind farm
B D
€65M
€3M for
Implementation wind farm
Turbines €40k per
Foundations C 2MW
Operation
Sub-station Operation machine
Cabling Maintenance
Grid connection Administration
Wind farm economic profile
Economy of wind power operation

“Wind turbines are expensive generating

installation investments. Hence the
production costs are highly dependent on
installation costs and their financing.”
Offshore Wind Power - Danish Experiences and Solutions
Published by the Danish Energy Agency
October 2005

Another component of the cost:

Cost of Capital
The cost of the money needed to build the
wind farm
Summary
In this lecture you have learnt that:

•A wind farm has

development, construction, operation and decommissioning
phases
•Cost components for a wind farm are
planning, construction, maintenance, decommissioning & capital
•Wind energy projects are
capital intensive compared to conventional energy projects