Wind Project
Cost of Energy
Calculation

Furthering our example of a Home Power Net-Metering System, the Cost of Energy can be determined.

This project is using an ARE442 Wind generator rated at 10 Kw power and 1,800 KWH/Month Energy production, with an Installed Cost (IC) of $48,000.

Our example becomes:

COE = (IC*FCR + AOM)/AKWH

COE = (48,000*0.09 + 480)/21, 600

COE = 22.22 Cents/KWH

In our example of the Home Power Net-Metering System for Kauai, Hawaii (where there is no rebate so back to the original IC cost of $48K), the levelized Cost of Energy (COE) over the life cycle of the hardware estimated at 20 years with Planned Maintenance Schedule (PMS) can be calculated.

With a Levelized Cost of Energy (COE) of 22.22 Cents/KWH, and a grid-market rate of 41 Cents/KWH this Home Power Net-Metering System makes economic sense.

NOTE: These economic models use a FIXED value of Energy. Since Energy is rising in price in all markets the real Simple Payback and Cost of Energy is much better than calculated. Doing a Yearly Net-Present Value and a spreadsheet would allow you to use these general equations to calculate more accurately your real performance expectation.

The Economic Performance of your Wind Project is dominated by your real Installed Cost of hardware, and your Actual energy production at your site.

This will require investigation into your proposed Wind Equipment Manufacturer, and the actual physical characteristics of your site. Factors such as road access, fencing, gates, soil conditions, specialized equipment for installation (especially true for Large Wind Turbine projects) such as Boom Trucks or large Cranes.

Energy Production is the key to your success with a Wind Project. The higher the Tower the faster the wind, the more productive your equipment will be.

Site your towers at the highest part of your land, in the clearest location from obstacles such as buildings, trees or signs. Siting Issues will be covered in more detail in later chapters, but site considerations are mentioned here because they have significant impact on your economic performance.






Wind Power Economics - Cost of Energy Example wipoeccoofen
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