Commercial Wind Turbine Systems and Applications - Wind Turbine Technology: Fundamental Concepts of Wind Turbine Engineering - page 257

Financial Elements Needed for Development
From a financial perspective, the key elements that determine the viability of wind pow-
er development are cost , revenue , and the desired rate of return on investment. State and
federal policies are often implemented through financial incentives such as tax credits or tax
holidays. In some cases disincentives are reflected in the overall financial equation. The cost
element includes the price of the turbine, the cost of installation (including permits, site plans
and drawings, insurance, and financing charges), the infrastructure needed to operate the
station ( e.g ., roads, transmission lines, power handling devices, and service buildings), and
operation and maintenance costs. The infrastructure costs are significantly influenced by the
terrain, difficulty of access and construction (whether the land is flat or mountainous), and
proximity to the existing utility grid. Operation and maintenance costs are determined by the
station's size and the reliability of its equipment.
Revenue is determined by the wind resource, the turbine availability, turbine performance
at individual sites throughout the station, and the rate paid by the off-taker for the energy gen-
erated. The desired rate of return is influenced by the investment community's perception
of the project risk , the rate of return from competing investments of similar risk, the type of
investment, investor needs, federal and state tax laws, and the political climate.
Wind Resource Assessment
The wind resource is the single most important factor in determining the economic vi-
ability of a wind power project. To determine the feasibility of wind energy development the
Department of Energy (DOE) funded development of the Wind Energy Resource Atlas for
the United States [Elliott 987]. Wind sites were cataloged in seven wind power classes. To
help power companies interpret data in the Atlas, DOE collaborated with the Electric Power
Research Institute (EPRI) to produce a simplified version of the atlas. For example, EPRI
assigned Class 5 to an excellent wind resource with an average annual speed greater than 6.0
m/s measured at a standard 0 m elevation above ground. With a typical Midwestern wind
shear, this annual average wind speed becomes 7.5 m/s at the 50-m hub elevation of a typi-
cal medium-scale turbine and 8.3 m/s at the 00-m hub height of many large-scale turbines.
There are vast areas of the country with this level of wind resource, especially in the Mid-
west, on ridgeline sites in the East, and offshore.
Measuring the wind at prospective sites is critically important. In the past, developers
often underestimated the difficulty of characterizing the wind resource especially in hilly
terrain. They also underestimated the decrease in wind speed within an array of turbines
caused by the upwind rotors. In theory, the ideal resource assessment would include collect-
ing wind speed, wind direction, turbulence intensity, and wind shear data for a 2-year period
at representative locations within the proposed wind power station. Alternatively, at least
full year of wind measurements may be adequate with good correlation to a nearby long-term
reference station with at least 0 years of data.
Regional wind maps are now publicly available for most parts of the country. These maps
are based on atmospheric flow models that are tuned and adjusted using actual measurements
where available. Despite improvements in micro-siting technology and procedures, energy
estimates for a new wind power station in hilly terrain may still be inaccurate by as much as
±5 percent. Consequently, financial institutions will often apply the so-called P-90 rule of
thumb, which states that no matter how well the wind measurement campaign is run, the wind
resource is probably 90 percent of the developers estimate.
Most small turbines are designed to start and operate at low wind speeds. Consequently,
a Class 2 or 3 wind site may be adequate for an economically viable small-scale turbine ap-
plication.