Economical Feasibility of Wind Energy Projects - Revision history

Lisafeldmann at 15:07, 16 June 2015

2015-06-16T15:07:11Z

Wiki Gardener at 10:40, 7 November 2014

2014-11-07T10:40:16Z

Ranisha at 12:23, 29 August 2014

2014-08-29T12:23:22Z

Ranisha: /* Overview */

2014-08-12T12:27:54Z

‎Overview

Ranisha at 12:27, 12 August 2014

2014-08-12T12:27:19Z

Ranisha: /* Further Information */

2014-08-01T09:58:48Z

‎Further Information

Wiki Gardener at 14:35, 16 June 2014

2014-06-16T14:35:53Z

Show changes

Wiki Gardener at 14:12, 9 August 2012

2012-08-09T14:12:00Z

Show changes

Wiki Gardener: moved Economical feasibility of wind energy projects to Economical Feasibility of Wind Energy Projects

2012-08-09T14:08:32Z

moved Economical feasibility of wind energy projects to Economical Feasibility of Wind Energy Projects

AnkeMaria at 15:11, 25 July 2011

2011-07-25T15:11:08Z

@@ Line 6: / Line 6: @@
 = Overview =
-To determine the economic feasibility of [[Wind_Energy_-_Introduction|wind power]] projects, a financial analysis should be carried out. The analysis should include factors such as site evaluation, cost of materials and so on to effectively determine the financial feasibility of the project.
+To determine the economic feasibility of [[Wind Energy - Introduction|wind power]] projects, a financial analysis should be carried out. The analysis should include factors such as site evaluation, cost of materials and so on to effectively determine the financial feasibility of the project.
 <br/>
@@ Line 13: / Line 13: @@
 Indicators for potential cost-effectiveness<ref>Contents of this page are from: GTZ/TERNA (n.D.): Feasibility Study for Wind Park Development in Ethiopia. Eschborn</ref> can be a.o.
 *min. wind speed 6 m/s for 10m
 *planned, installed capacity of about 20 MW
@@ Line 22: / Line 23: @@
 The level of investigation and cost estimates shall be of sufficient accuracy and detail to satisfy the needs of financiers and decision makers.<br/><u>The outline of project costs should include:</u>
 *Itemized specification of investment costs (wind turbines, foundation, civil works, electrical work, consulting services, physical and price contingencies, etc.) in actual prices (year of study), including a financing cash flow broken down in foreign and local cost components. In arriving at final cost estimates, the Firm of Consultants shall investigate the effect of the possibility of increased use of local participation and local materials in as many aspects of the work as possible.
 *If need be, computation of shadow prices for foreign exchange and local inputs
@@ Line 29: / Line 31: @@
 *Computation of long-run marginal costs (lifetime average costs) of wind energy generation
+<br/>
 = Estimation of Benefits<br/> =
 <u>The focus should be on:</u>
 *Economic benefits: avoided energy and capacity costs taking into account the wind farm’s impact on merit order dispatch, and considering the (avoided) system costs associated with alternative power plants that would be needed in the absence of wind parks. If feasible, undertake probabilistic production cost modelling. Also, the associated effects on poverty alleviation through possible reduction of electricity prices are to be analyzed.
 *Financial benefits: based on power purchase arrangements or feed-in tariffs (if different from economic benefits)
 *Positive external effects: estimation/approximation of environmental benefits (avoided emissions from thermal plant)
+<br/>
 = Economic and Financial Analysis =
 <u>The economic and financial appraisal of wind park projects should cover:</u>
 *Compliance with optimal power sector expansion plan
 *Compliance with criteria/objectives used by international institutions and programs to promote wind energy utilization (e.g. German technical and financial cooperation)
@@ Line 53: / Line 57: @@
 *Discussion of alternative operational schemes for the wind park under support of an experienced wind park operator<ref>GTZ/TERNA (n.D.): Feasibility Study for Wind Park Development in Ethiopia. Eschborn</ref>
+<br/>
 = Financial Analysis - Example from Namibia<ref>Source: GIZ 2000: Wind Energy Projects in Morocco and Namibia pp. 10fckLRgtz2000-en-wind-energy-projects-marocco-namibia</ref><br/> =
-<u>The investment costs and expenditures on '''operation and maintenance (O&M)''' for the sites and system configurations are given in the table below: </u>
+<u>The investment costs and expenditures on '''operation and maintenance (O&M)''' for the sites and system configurations are given in the table below:</u>
 Cost Overview of Selected Wind Parks in Lüderitz (March 1999)
@@ Line 120: / Line 124: @@
 <br/>In a first step, the costs of electricity generated by wind farms were compared with the actual electricity costs under status quo conditions. The economic analysis evaluated the utilisation of wind energy for electricity generation from the country’s point of view, assuming that Namibia continues to rely on imports from the RSA as per purchase agreement of 1996. This assumption was changed in the sensitivity analysis, taking into account alternative supply options and a different policy environment (e.g., greater degree of energy self-sufficiency).<br/>In the financial analysis, the key assumption was that the benefits of wind energy are measured in terms of avoided costs of bulk energy supplies from NamPower, valued in terms of the currently prevailing wholesale tariffs, adjusted upwards by 12% to account for the pending increase in tariffs. The forecast horizon (project lifetime) covers the period 2000 - 2020, with the pay-back period starting in 2001. Payments, i.e., cash in- and/or outflows, are due at the beginning of each year, expressed in N$ at constant prices of 1999.
+<br/>
 <u>The above costs were then translated into '''“Long Run Marginal Costs” (LRMC)''', indicating the generation costs of wind power during the lifetime of the wind park:</u>
@@ Line 156: / Line 160: @@
 <u>The following table presents these mutually exclusive options as there are:</u>
 *A capital grant or
 *an equivalent “wind energy levy” on electricity consumption (based on 1,700 GWh in 1997).
@@ Line 208: / Line 213: @@
 The above figures indicate that an assumed CO<sub>2</sub> bonus of N$ 100 per ton of avoided CO<sub>2</sub> would warrant the support schemes to a large extent, but sources for grant financing have still to be found. As a result of the workshop held in March, all Namibian stakeholders gave their firm committments to further pursue the wind energy option, provided that the international donor community would make available the additional financial support required to make the project economically and financially viable.
+<br/>
 = Further Information =
@@ Line 216: / Line 221: @@
 *[[Economic Analyses of Wind Energy Projects|Economic Analyses of Wind Energy Projects]]<br/>
+<br/>
 = References<br/> =
@@ Line 222: / Line 227: @@
 <references />
 [[Category:Financing_Wind]]

@@ Line 1: / Line 1: @@
 [[Portal:Wind|► Back to Wind Portal]]
 = Overview =
-To determine the economic feasibility of wind power projects, a financial analysis should be carried out. The analysis should include factors such as site evaluation, cost of materials and so on to effectively determine the financial feasibility of the project.
+To determine the economic feasibility of [[Wind_Energy_-_Introduction|wind power]] projects, a financial analysis should be carried out. The analysis should include factors such as site evaluation, cost of materials and so on to effectively determine the financial feasibility of the project.
 = Indicators for Cost-effectiveness<br/> =
@@ Line 14: / Line 17: @@
 *supportive framework conditions (local and national)
 <br/>
-[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]<br/>
 = Estimation of Costs<br/> =
 The level of investigation and cost estimates shall be of sufficient accuracy and detail to satisfy the needs of financiers and decision makers.<br/><u>The outline of project costs should include:</u>
 *Itemized specification of investment costs (wind turbines, foundation, civil works, electrical work, consulting services, physical and price contingencies, etc.) in actual prices (year of study), including a financing cash flow broken down in foreign and local cost components. In arriving at final cost estimates, the Firm of Consultants shall investigate the effect of the possibility of increased use of local participation and local materials in as many aspects of the work as possible.
 *If need be, computation of shadow prices for foreign exchange and local inputs
@@ Line 28: / Line 29: @@
 *Computation of long-run marginal costs (lifetime average costs) of wind energy generation
-[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]
 = Estimation of Benefits<br/> =
 <u>The focus should be on:</u>
 *Economic benefits: avoided energy and capacity costs taking into account the wind farm’s impact on merit order dispatch, and considering the (avoided) system costs associated with alternative power plants that would be needed in the absence of wind parks. If feasible, undertake probabilistic production cost modelling. Also, the associated effects on poverty alleviation through possible reduction of electricity prices are to be analyzed.
 *Financial benefits: based on power purchase arrangements or feed-in tariffs (if different from economic benefits)
 *Positive external effects: estimation/approximation of environmental benefits (avoided emissions from thermal plant)
-[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]
 = Economic and Financial Analysis =
 <u>The economic and financial appraisal of wind park projects should cover:</u>
 *Compliance with optimal power sector expansion plan
 *Compliance with criteria/objectives used by international institutions and programs to promote wind energy utilization (e.g. German technical and financial cooperation)
@@ Line 52: / Line 51: @@
 *Outline of the projects’ expected financial performance and risks (cash-flow and liquidity analysis) according to internationally accepted accounting standards
 *Description of possible financing options and discussion of financial support measures/schemes. This shall include an analysis of current lending strategies of major development banks, focal areas of the relevant institutions as well as a description of typical loan conditions in case the projects were considered suitable by the lenders.
-*Discussion of alternative operational schemes for the wind park under support of an experienced wind park operator <ref>GTZ/TERNA (n.D.): Feasibility Study for Wind Park Development in Ethiopia. Eschborn</ref>
+*Discussion of alternative operational schemes for the wind park under support of an experienced wind park operator<ref>GTZ/TERNA (n.D.): Feasibility Study for Wind Park Development in Ethiopia. Eschborn</ref>
 = Financial Analysis - Example from Namibia<ref>Source: GIZ 2000: Wind Energy Projects in Morocco and Namibia pp. 10fckLRgtz2000-en-wind-energy-projects-marocco-namibia</ref><br/> =
-The investment costs and expenditures on '''operation and maintenance (O&M)''' for the sites and system configurations are given in the table below: Cost Overview of Selected Wind Parks in Lüderitz (March 1999)
+<u>The investment costs and expenditures on '''operation and maintenance (O&M)''' for the sites and system configurations are given in the table below: </u>
-<br/>
+Cost Overview of Selected Wind Parks in Lüderitz (March 1999)
-{| border="1" cellspacing="1" cellpadding="1" style="width: 100%"
+{| cellspacing="1" cellpadding="1" border="1" style="width: 100%"
 |-
 | bgcolor="#cccccc" | '''Site'''<br/><br/><br/>
@@ Line 121: / Line 120: @@
 <br/>In a first step, the costs of electricity generated by wind farms were compared with the actual electricity costs under status quo conditions. The economic analysis evaluated the utilisation of wind energy for electricity generation from the country’s point of view, assuming that Namibia continues to rely on imports from the RSA as per purchase agreement of 1996. This assumption was changed in the sensitivity analysis, taking into account alternative supply options and a different policy environment (e.g., greater degree of energy self-sufficiency).<br/>In the financial analysis, the key assumption was that the benefits of wind energy are measured in terms of avoided costs of bulk energy supplies from NamPower, valued in terms of the currently prevailing wholesale tariffs, adjusted upwards by 12% to account for the pending increase in tariffs. The forecast horizon (project lifetime) covers the period 2000 - 2020, with the pay-back period starting in 2001. Payments, i.e., cash in- and/or outflows, are due at the beginning of each year, expressed in N$ at constant prices of 1999.
-{| border="1" cellspacing="1" cellpadding="1" style="width: 100%"
+<u>The above costs were then translated into '''“Long Run Marginal Costs” (LRMC)''', indicating the generation costs of wind power during the lifetime of the wind park:</u>
 |-
 | style="background-color: rgb(204, 204, 204)" | '''Wind Park Lüderitz'''<br/>
@@ Line 166: / Line 165: @@
 Alternative Break-Even Requirements for Wind Parks in Lüderitz
-{| border="1" cellspacing="1" cellpadding="1" style="width: 100%"
+{| cellspacing="1" cellpadding="1" border="1" style="width: 100%"
 |-
 | style="background-color: rgb(204, 204, 204)" | '''Site'''<br/>
@@ Line 209: / Line 208: @@
 The above figures indicate that an assumed CO<sub>2</sub> bonus of N$ 100 per ton of avoided CO<sub>2</sub> would warrant the support schemes to a large extent, but sources for grant financing have still to be found. As a result of the workshop held in March, all Namibian stakeholders gave their firm committments to further pursue the wind energy option, provided that the international donor community would make available the additional financial support required to make the project economically and financially viable.
-[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]
 = Further Information =
@@ Line 217: / Line 216: @@
 *[[Economic Analyses of Wind Energy Projects|Economic Analyses of Wind Energy Projects]]<br/>
-== References<br/> ==
 <references />
 [[Category:Wind]]

@@ Line 1: / Line 1: @@
 [[Portal:Wind|► Back to Wind Portal]]
@@ Line 16: / Line 15: @@
-[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]<br/>
+[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]<br/>
 = Estimation of Costs<br/> =
@@ Line 29: / Line 28: @@
 *Computation of long-run marginal costs (lifetime average costs) of wind energy generation
-[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]
+[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]
 = Estimation of Benefits<br/> =
@@ Line 39: / Line 38: @@
 *Positive external effects: estimation/approximation of environmental benefits (avoided emissions from thermal plant)
-[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]
+[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]
 = Economic and Financial Analysis =
@@ Line 55: / Line 54: @@
 *Discussion of alternative operational schemes for the wind park under support of an experienced wind park operator <ref>GTZ/TERNA (n.D.): Feasibility Study for Wind Park Development in Ethiopia. Eschborn</ref>
-[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]
+[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]
 = Financial Analysis - Example from Namibia<ref>Source: GIZ 2000: Wind Energy Projects in Morocco and Namibia pp. 10fckLRgtz2000-en-wind-energy-projects-marocco-namibia</ref><br/> =
@@ Line 210: / Line 209: @@
 The above figures indicate that an assumed CO<sub>2</sub> bonus of N$ 100 per ton of avoided CO<sub>2</sub> would warrant the support schemes to a large extent, but sources for grant financing have still to be found. As a result of the workshop held in March, all Namibian stakeholders gave their firm committments to further pursue the wind energy option, provided that the international donor community would make available the additional financial support required to make the project economically and financially viable.
-[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]
+[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]
 = Further Information =
@@ Line 218: / Line 217: @@
 *[[Economic Analyses of Wind Energy Projects|Economic Analyses of Wind Energy Projects]]<br/>
-[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]
+[[Economical_Feasibility_of_Wind_Energy_Projects#toc|►Go to Top]]
 == References<br/> ==

@@ Line 1: / Line 1: @@
 [[Portal:Wind|► Back to Wind Portal]]
 = Overview =
-To determine the economic feasibility of wind power projects, a analysis analysis should be carried out. The analysis should include factors such as site evaluation, cost of materials and so on to effectively determine the financial feasibility of the project.
+To determine the economic feasibility of wind power projects, a financial analysis should be carried out. The analysis should include factors such as site evaluation, cost of materials and so on to effectively determine the financial feasibility of the project.
 = Indicators for Cost-effectiveness<br/> =

@@ Line 1: / Line 1: @@
-== Overview ==
+[[Portal:Wind|► Back to Wind Portal]]
-== Indicators for Cost-effectiveness<br/> ==
+= Indicators for Cost-effectiveness<br/> =
 Indicators for potential cost-effectiveness<ref>Contents of this page are from: GTZ/TERNA (n.D.): Feasibility Study for Wind Park Development in Ethiopia. Eschborn</ref> can be a.o.
@@ Line 11: / Line 13: @@
 *supportive framework conditions (local and national)
-== Estimation of Costs<br/> ==
+[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]<br/>
 The level of investigation and cost estimates shall be of sufficient accuracy and detail to satisfy the needs of financiers and decision makers.<br/><u>The outline of project costs should include:</u>
 *Itemized specification of investment costs (wind turbines, foundation, civil works, electrical work, consulting services, physical and price contingencies, etc.) in actual prices (year of study), including a financing cash flow broken down in foreign and local cost components. In arriving at final cost estimates, the Firm of Consultants shall investigate the effect of the possibility of increased use of local participation and local materials in as many aspects of the work as possible.
 *If need be, computation of shadow prices for foreign exchange and local inputs
@@ Line 23: / Line 27: @@
 *Computation of long-run marginal costs (lifetime average costs) of wind energy generation
-<br/>
+[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]
-== Estimation of Benefits<br/> ==
+= Estimation of Benefits<br/> =
 <u>The focus should be on:</u>
 *Economic benefits: avoided energy and capacity costs taking into account the wind farm’s impact on merit order dispatch, and considering the (avoided) system costs associated with alternative power plants that would be needed in the absence of wind parks. If feasible, undertake probabilistic production cost modelling. Also, the associated effects on poverty alleviation through possible reduction of electricity prices are to be analyzed.
 *Financial benefits: based on power purchase arrangements or feed-in tariffs (if different from economic benefits)
 *Positive external effects: estimation/approximation of environmental benefits (avoided emissions from thermal plant)
-<br/>
+[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]
-== Economic and Financial Analysis ==
+= Economic and Financial Analysis =
 <u>The economic and financial appraisal of wind park projects should cover:</u>
 *Compliance with optimal power sector expansion plan
 *Compliance with criteria/objectives used by international institutions and programs to promote wind energy utilization (e.g. German technical and financial cooperation)
@@ Line 47: / Line 53: @@
 *Discussion of alternative operational schemes for the wind park under support of an experienced wind park operator <ref>GTZ/TERNA (n.D.): Feasibility Study for Wind Park Development in Ethiopia. Eschborn</ref>
-<br/>
+[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]
-== Financial Analysis - Example from Namibia<ref>Source: GIZ 2000: Wind Energy Projects in Morocco and Namibia pp. 10fckLRgtz2000-en-wind-energy-projects-marocco-namibia</ref><br/> ==
+= Financial Analysis - Example from Namibia<ref>Source: GIZ 2000: Wind Energy Projects in Morocco and Namibia pp. 10fckLRgtz2000-en-wind-energy-projects-marocco-namibia</ref><br/> =
 The investment costs and expenditures on '''operation and maintenance (O&M)''' for the sites and system configurations are given in the table below: Cost Overview of Selected Wind Parks in Lüderitz (March 1999)
 <br/>
@@ Line 202: / Line 208: @@
 The above figures indicate that an assumed CO<sub>2</sub> bonus of N$ 100 per ton of avoided CO<sub>2</sub> would warrant the support schemes to a large extent, but sources for grant financing have still to be found. As a result of the workshop held in March, all Namibian stakeholders gave their firm committments to further pursue the wind energy option, provided that the international donor community would make available the additional financial support required to make the project economically and financially viable.
-<br/>
+[[Economical_Feasibility_of_Wind_Energy_Projects#Overview|Go to Top]]
-−
-== Further Information ==
+= Further Information =
-*[[Portal:Wind|Wind Portal on energypedia]]<br/>
+*[[Portal:Wind|Wind Portal on energypedia]]
-*[[Financing_Aspects_-_Wind_Energy|Financing Aspects - Wind Energy]]<br/>
+*[[Financing Aspects - Wind Energy|Financing Aspects - Wind Energy]]<br/>
-*[[Economic_Analyses_of_Wind_Energy_Projects|Economic Analyses of Wind Energy Projects]]<br/>
+*[[Economic Analyses of Wind Energy Projects|Economic Analyses of Wind Energy Projects]]<br/>
 == References<br/> ==

← Older revision		Revision as of 09:58, 1 August 2014
Line 204:		Line 204:
	<br/>		<br/>

−	~~== Further Information ==~~

−	~~[[Portal:Wind\|Wind Portal on energypedia]]<br/>~~	+	== Further Information ==

		+	*[[Portal:Wind\|Wind Portal on energypedia]]<br/>
		+	*[[Financing_Aspects_-_Wind_Energy\|Financing Aspects - Wind Energy]]<br/>
		+	*[[Economic_Analyses_of_Wind_Energy_Projects\|Economic Analyses of Wind Energy Projects]]<br/>

@@ Line 1: / Line 1: @@
-== Indicators for cost-effectiveness  ==
+== <ref>Contents of this page are from: GTZ/TERNA (n.D.): Feasibility Study for Wind Park Development in Ethiopia. Eschborn</ref>Indicators for cost-effectiveness  ==
 Indicators for potential cost-effectiveness can be a.o.<br>
@@ Line 28: / Line 28: @@
 == Economic and Financial Analysis  ==
 The economic and financial appraisal of wind park projects should cover:
 *Compliance with optimal power sector expansion plan
@@ Line 40: / Line 40: @@
 *Discussion of alternative operational schemes for the wind park under support of an experienced wind park operator <ref>GTZ/TERNA (n.D.): Feasibility Study for Wind Park Development in Ethiopia. Eschborn</ref>
 <br>
 == Financial analysis - example from Namibia<ref>Source: GIZ 2000: Wind Energy Projects in Morocco and Namibia pp. 10fckLRgtz2000-en-wind-energy-projects-marocco-namibia</ref>  ==