Economics - Wind Energy: Renewable Energy and the Environment - page 253

TABLE 12.2
Representative Lease for Wind Farm

Resource
Flat fee
$/acre/year

1-3 year
$10,000
$1-4

Contract
Option

30 year
2 (10 year)

Construction, road, etc.
Flat fee

$3-4/month
$4,000/MW

Income/year
Royalty Per turbine (minimum)

4%
$4,000/MW

Escalation 0.5% every 5 years

For wind farms, the landowner may receive one or more offers, and the leases (Table 12.2) will
differ by region, wind resource, and access to transmission. Some landowners are forming associa-
tions for dealing with wind farm developers. In the United States, wind turbines can be installed on
land currently under the Conservation Reserve Program (CRP); however, there may be a penalty or
reimbursement, which is decided by the CRP district.
Other considerations for the landowner are: Who certifies the energy meter? And when? If there is
future revenue from pollution credits, the landowner should share in that return. In countries where
the national or state governments control the land, the question concerns present occupants, who and
when receives payment (once or annual), and how much is paid for land removed from previous use.
The construction phase of a wind farm project will take from 6 months to a year, while the total
development time from selection of land to commission may take up to 6 years (Table 12.3). Wind
farms can be installed much faster than transmission lines can be built. Besides the production tax
credits, a limiting factor that began in 2008 was that the demand for wind turbines was larger than
production, which means lead times for delivery are 2 to 3 years after purchase orders.

12.7.1 C OSTS
The installed costs have increased from around $1.2 million/MW in 2003 to $1.6-2 million in 2008
(both in $ 2008), because of the increase in the price of steel, copper, and cement. Also, the price

TABLE 12.3
Representative Wind Farm Project Timeline

Site Evaluation Permitting and Negotiation Construction, Commission

Identify site, conduct
preliminary evaluation, secure
land options
5-8 months

Permits, land use, transmission
Negotiate power purchase
agreement, interconnect
12-36 months

Construction
4-12 months

Install anemometers, collect
and analyze data
12-24 months

Turbine purchase agreement
12-36 months

Commission
1-2 months

Developer (36-72 months)

Turbine supplier (24-36
months)