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Revenue

The profitability of a Wind Farm depends on the sort of wind turbine used, construction costs, performance of wind turbine generation, Operations and Maintenance (O&M), land lease/ royalty payments, and wholesale energy costs from a Power Purchase Agreement.

Large turbines selling power to the grid can be financially viable where the typical wind speed is estimated to be larger than seven m/s (15.66 mph). They are seemingly to become additional engaging to businesses in future, as technology continues to improve and the deregulated energy market develops.

Furthermore, little turbines and wind pumps might additionally be viable with average wind speeds as low as five m/s (11.eighteen mph), assuming the sole different could be a more expensive power supply like a diesel generator.

Prices

The development prices of a wind farm are largely determined by 2 factors: the complexity of the site and the chance of maximum loads. Project sites with tough ground conditions like hard rock, wet, or boggy conditions may be thought of complex. Conjointly, project sites with tough access perhaps be thought of complicated, as well. More, a very windy site with high extreme masses would lead to a additional expensive civil infrastructure as well as a better specification for the turbines.

Additionally, the price of the grid connection could additionally be important. Grid association costs are laid low with the distance to a suitable network association point, the voltage level of the existing network, and also the network operator’s principles for charging for connections and for the utilization of the electricity system.

Since the first price of manufacturing wind energy is construction with no further fuel prices, the typical cost of wind energy per unit of production depends on key assumptions, such as the value of capital and years of assumed service. The marginal cost of wind energy once a plant is constructed is sometimes less than one cent per kWh. Because the value of capital plays a giant part in projected cost, risk perceived by investors can affect projected costs per unit of electricity.

The business viability of wind power also depends on the pricing regime for power producers. Electricity costs are highly regulated worldwide, and in many locations could not reflect the total value of production, including indirect subsidies or negative externalities. Customers may enter into long-term pricing contracts for wind to cut back the chance of future pricing changes, thereby guaranteeing additional stable returns for projects at the development stage. These might take the form of customary offer contracts, whereby the system operator undertakes to buy power from wind at a fixed worth for a bound amount (maybe up to a limit); these prices may be completely different than purchase prices from different sources, and even incorporate an implicit subsidy.

In jurisdictions where the worth for electricity relies on market mechanisms, revenue for all producers per unit is higher when their production coincides with periods of upper prices. The profitability of wind farms can so be higher if their production schedule coincides with these periods.

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