Feasibility Study - Wind Energy
The term Feasibility Study related to wind energy projects is used for assessments of very different extensiveness. Feasibility studies consider the results from wind measures (cp.assessing wind potentials). If the results from wind measures indicate that technical and economical operation of wind energy (projects) can be considered viable or at least expectable, a feasiblity study will be conducted. Based on the wind resource appraisal and other relevant inputs, the feasibility study shall be conducted to
- Determine the optimum unit size of the wind turbines under the technical and transport infrastructure conditions of country
- Optimize the technical lay-out of the wind park site
- Assess the comparative economic and financial viability of the project and propose a decision for implementation
The European Wind Energy Association defines the main contents of a feasibility study as follows:
- The technical aspects already regarded during the pilot study are assessed in a more detailed manner, including on-site wind monitoring to determine a draft design and layout for the installation.
- an economic assessment is conducted to establish the commercial viability of the project;
- an appraisal and scoping exercise to identify specific environmental constraints and opportunities is implemented
- possible planning constraints are assessed[1]
Especially the economic assessment of the wind park viability includes several large subtasks to determine all economic parameters and variables of a wind project:
- An energy production estimation to define expected financial returns
- A complete estimation of costs (investment, operation and maintenance, costs of project development)
- An economic assessment of the project benefits concerning economic development and welfare of the region or country. Influence on electricity prices and potential for poverty reduction are important aspects of these economic assessments.
- An assessment of financing options with focus on potential participation with the Clean Development Mechanism (CDM)
- A financial analysis based on the estimation of costs an including a cost-benefit analysis, which allows an exact statement concerning investment returns. Discussion and evaluation of different operation models have to be included.
The project appraisal related to environmental and social constraints should be based also on a dialogue with the local population and planning authorities.
Detailed assessment of site conditions
Assessment of site conditions starts with general description of the area proposed for the project: The altitude above sea level, the orographic conditions as well as the surface properties (e.g. plants, infrastructure) are important information included in site description. The availability of maps is checked.
Site limitations like domestic dwellings, important roads, nearby airports or telecommunications facilities for the wind park area are identified. And the possible area available for the wind park layout is determined.
A central aspect is the analysis of ground and soil conditions to choose the necessary basement types for the individual turbines and the related costs of foundation. The regional site geology is described in general and the seismic conditions at the site are investigated, if there is a potential risk of earthquakes in the area. Distance to city infrastructure and ports is considered, because in most cases turbine parts are transported to the project sites via roads. Road conditions especially the stability for heavy freight, inclination and curve radiants are important for the long an heavy parts of wind turbines, too. Often the feasibility of transport for turbines of capacities > 2 MW is assessed seperatly. Available crane capacities in the project country are checked.
At the point the feasibility study is conducted, an environmental impact assessment must have been carried out and the environmental constraints are used in the development of the project layout.
For information about possible legal constraints of the project development, a central task is to identify conflicting interests with other land users (e.g. mining activities, recreational use).
Wind Resources
The description of the wind resources for a feasibility study includes a detailed description of the measurement campaign, which has been conducted for project development. Mast positions, used measuring technology like anemometers and data loggers as well as their application are described carefully to provide a reliable informationable basis for project appraisal. Besides wind resources further data like temperature or air density is presented in this section of a feasibility study.
The outcome is presented as a list of average wind speeds per wind direction (usually wind direction is divided in sectors of 30°) and their frequency distribution. A very important step for rating the available wind resources is the analysis of the wind data. Primarily quality of data is checked carefully concerning erroneous values, which have to be sorted out or have to be replaced by suitable ones. Data losses over longer periods of time distort the information.
Also measurement campaigns for wind park planning are conducted for minimum during one year, the results can be regarded as representative for an estimation of energy yields during common wind project lifetimes of 20 years, because wind conditions
are not stable over the years and oscillate around the long term average. For that reason a correlation analysis of the collected data with long-term data gathered from other regional sources has to be conducted. If long-term data is available, gathered wind data of the measurement campaign can be adjusted considering these values. According to international standards, this has to be done by comparing and adjusting the measured wind data by means of suitable mathematical methods with data obtained from long-term measurements - usually meteorological stations. A period of at least 10 years (15 to 20 years is preferred) can be considered as longter.
Wind turbines are subjected to environmental conditions which may affect their loading, durability and operation. To ensure an appropriate level of safety and reliability, the environmental parameters shall be taken into account during the selection of appropriate wind turbines. The categories used to describe wind turbines suitable for certain site conditions are the so-called IEC-classes.
Technical Layout of Wind Park
Internal Wind Park Cabling
Energy Production Estimation
The calculation of the wind resources on-site and the corresponding energy production are based on the processed wind data collected by the measuring masts at Mesobo-Harena plateau and nearby Maymekden (see chapter 5.1) with the energy yield estimation carried out by means of the WindPro and WAsP software packages.
Grid Connection
Estimation of costs
Investment costs estimation
Construction period
Potential for local/regional input
Operation and Maintenance Costs
Capacity Credit
Any kind of electrical power plant is required to answer the crucial question: To what extent is a specific energy production unit with an installed nameplate capacity available to meet system demand?
Typically the answer is derived from a statistical analysis of this period, when a unit or technology is not available, even if it is supposed to be working, generally termed as forced outage. For conventional generation units this is mainly a technical question, whereas for intermittent resources like wind, solar and hydro power, it is a question of fuel availability: is wind, water or solar radiation available when it is needed? And if yes, what amount is available and how does the intermittency influence the rest of the electrical supply system? The answer is given by the capacity credit, which should consider each of the posed questions.
There are various definitions of the term capacity credit (CC), and several synonyms are used in parallel, each bearing a similar variety of definitions. The two most common synonyms of CC are "firm capacity" and "capacity value".
The CC can be defined as the firm capacity, which can be replaced by a certain amount of installed wind power or any other energy source. It can be used either as a value in MW or as a percentage of the installed wind capacity. This is the terminology used in recent studies throughout industrialised countries, where wind energy is replacing other forms of energy[2]. In developing countries, which pursue high goals for improving the electrification rate, it is important to analyse how much capacity wind energy can add to the current system.
Economic Analysis
Following the "World Bank Handbook for Economic Analysis of Investment Operations" [3], the main purpose of an economic analysis is to help to design and select projects that contribute to the welfare of a country. Whereas the financial analysis evaluates the project from the point of view of the operating company or Independent Power Producer (IPP), the economic
analysis evaluates the project from the point of view of the whole economy of the country.
The purpose of the investigation is to compare from a macroeconomic standpoint the benefits of the project with the costs it incurs, as is customary in any cost-benefit analysis. The standard of evaluation for costs and benefits is a monetary quantification. To the greatest possible extent, the project impacts are evaluated in terms of economic market prices. Shadow prices are employed, i.e., internal accounting prices that free the day-to-day (market) prices from multifarious biases. In other words, shadow prices represent an attempt to illuminate the actual costs of a product or service for the economy as a whole. In comparison with micro- and macro-economic prices, shadow prices are devoid of taxes and charges, duties and subsidies.
CDM Assessment
The Clean Development Mechanism (CDM) as established under Article 12 of the Kyoto Protocol (KP) represents a collaborative policy approach between industrialised and developing countries aimed at promoting sustainable infrastructure projects in developing countries whilst simultaneously reducing greenhouse gas (GHG) emissions such as CO2. From the perspective of industrialised countries, CDM represents a cost-effective option to comply with their national emission reduction obligations under the KP. Developing countries benefit from CDM as an additional co-financing source for sustainable energy projects. Its applicability to particular projects, however, depends on how these cope with country-specific and project specific eligibility requirements.
Financial Analysis
This financial analysis is intended to clarify whether or not the wind farm project is financially feasible for the described parameters. And, as the case may be, whether or not and, if so, how the financial efficiency threshold can be reached and surpassed and, if so, how by which means of technical and non-technical modifications.
The main difference between a financial analysis and an economic analysis is that, in the financial analysis, the wind farm is viewed as an enterprise and in the economic analysis the windfarm is evaluated from the point of view of the national economy of the country. In the financial analysis, the windfarm operating company has to earn enough money, by feeding electricity into the existing grid, to cover its operating costs, interest payments, loan payments and distribution of dividends to equity investors. The object of consideration is the commercial or microeconomic.
Framework Analysis for Wind Energy
Financing Options
Regulatory and Legal Framework
References
- ↑ European Wind Energy Association (1999) European best practice guidelines for wind energy development, retrieved 19.7.2011 [[1]]
- ↑ Dena (2005) Konzept für eine stufenweise Entwicklung des Stromnetzes in DeutschlandfckLRzur Anbindung und Integration von Windkraftanlagen Onshore und Offshore unter Berücksichtigung der Erzeugungs- und Kraftwerksentwicklungen sowie der erforderlichen Regelleistung. In: Energiewirtschaftliche Planung für die Netzintegration von WindenergiefckLRin Deutschland an Land und Offshore bis zum Jahr 2020 - Netzstudie I, DeutschefckLREnergie Agentur (German Energy Agency)
- ↑ World Bank (1996) Handbook on Economic AnalysisfckLRof Investment Operations, retrieved 19.7.2011 [[2]]
