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ECONOMICS $2008 Vaughn Nelson Cost of Energy$0.06-0.08/kWh Landowner$4,000-6,000/MW/yr Land removed from production 1-3 acres per turbine, primarily roads.

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Presentation on theme: "ECONOMICS $2008 Vaughn Nelson Cost of Energy$0.06-0.08/kWh Landowner$4,000-6,000/MW/yr Land removed from production 1-3 acres per turbine, primarily roads."— Presentation transcript:

1 ECONOMICS $2008 Vaughn Nelson Cost of Energy$ /kWh Landowner$4,000-6,000/MW/yr Land removed from production 1-3 acres per turbine, primarily roads Construction jobs/100 MW100 O&M Jobs/100 MW10-14 Renewable Energy Credits$3/MWh Carbon trading ?$20/metric ton/yr Green pricing$0.03/kWh

2 INCENTIVES Regulations Federal: PURPA 1978, open transmission 1997 Production Tax Credit (PTC)$0.21/kWh 1985, $0.015/kWh for 10 years (inflation factor), extended a number of times, now through 2011 Green pricing; ~$3 per block of 100 kWh Tax breaks; PILOT, payment in lieu of taxes TX: Renewable Energy Credits (1 REC = 1 MWh) Utilities must acquire % of sales, 08 values ~ $53

3 INCENTIVES Database of State Incentives for Renewables & Efficiency (www.dbsireusa.com) Renewable Portfolio Standard (RPS) TX, 1999; 900 MW by 2003: 2005; 5,880 MW by 2015 (500 MW from other renewables) plus goal of 10,000 MW by 2025 (will surpass in 2010) NM: RPS, investor utilities, 20% (wind 4%) by 2020, wind; rural coops, 10% by 2020 OK: RPS, none

4 May-14 LEVELIZED COST OF ENERGY COE = (FCR * ICC) + LRC + AOM AEP COE=LEVELIZED COST OF ENERGY, $/kWh or $/MWh FCR=FIXED CHARGE RATE, per year ICC=INITIAL CAPITAL COST, $ LRC=LEVELIZED REPLACEMENT COST, $/yr AEP=NET ANNUAL ENERGY PRODUCTION, per/yr AOM=ANNUAL OPERATION & MAINTENANCE, $/yr

5 PERCENT ICC Turbine74-82 Foundation1-6 Electric2-9 Connection to grid2-9 Finance1-5 Land1-3 Roads1-5 Consultants1-3

6 WIND FARMS, COST OF ENERGY

7 May-14 COE EXAMPLE 50 MW WIND FARM, 1 MW TURBINES FCR=8% = 0.08 ICC=$2,000/kW = $2,000,000 LRC=$15,000 AOM=$0.01/kWh availability elevation AEP=2,700,000 98% 1000 m COE = (0.08 * 2,000,000) + 15, ,000 2,700,000 COE = $0.065 / kWh

8 May-14AEI WIND FARM EXAMPLE 50 MW WIND FARM, IC = $100,000,000 AEP = 50 * 2.7 *10 6 = 1.35*10 8 kWh/yr $ /kWh, with PTC $ /kWh Project Income $6-6.5 million/yr Land Owner royalty on $3-4 million/yr 4% = $120, ,000/yr $4,000-6,000/MW/yr = $200, ,000/yr 3,000 acres, 5 X 10 D spacing, Land removed from production 2 $4,000/turbine = $2,000/acre/yr

9 ESTIMATED ANNUAL ENERGY AEP = CF*GS*8760 CF = Capacity factor ( ) GS = Generator rated power 8760 = # hours in year AEP = 0.35 * 1000 kW * 8760 hr/yr = 3,060,000 kWh/yr Then adjust for elevation and availability AEP = 0.9*0.98*3,000,000 = 2,700,000 kWh/yr

10 CAPACITY FACTOR = AVG POWER/RATED POWER

11 CALCULATED ANNUAL ENERGY SpeedPowerHoursEnergy m/s kW kWh , , , , , ,540 SUM87603,060,545

12 May-14AEI WIND FARM EXAMPLE SPACING, based on terrain and prevailing wind direction Plains, row D, row-row D Mesa, row D, 1-3 rows General, row 2 - 5, row-row D D = rotor diameter Land removed from production, 1 to 5 % 1-2 acres/turbine in plains

13 Satellite view, part of Sweetwater Wind Farm

14 Aerial view, White Deer Wind Farm, yellow lines, 1 sq mile

15 WIND FARM SALES Fixed $ /kWh or $25-35/MWh Market (time of day?), Fuel Costs Price of natural gas at Henry Hub FERC (quarterly reports, MWh, $); have to know official wind farm name. summary-report.asp To calculate capacity factor, need wind farm capacity, MW; time period.

16 EXAMPLE INCOME Green Mountain Holdings, Lamar, CO 162 MW, 2008 by quarter #$1,0001,000 MWh$/MWh 14, , , , $18,821,000

17 INSTITUTIONAL NOISE, VISUAL, ENVIRONMENTAL (birds, bats, habitat) 15% in favor, 10% opposed, rest neutral $$$$ Landowner maximum - medium - none RURAL ECONOMIC DEVELOPMENT BIG BUCKS, BILLIONS OF DOLLARS 20,000 MW, Installed cost ~ $40 BB O&M 2,000 – 3,000 jobs


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