Legal Paper: “Cost, Price, and Risk Factors Associated with Wind Energy”

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Legal Paper:
“Cost, Price, and Risk Factors associated with Wind Energy”

Cost Components Associated with Wind Energy

Cost components of wind projects are determined by development, construction, and operation of the project. Most of the time there are two main factors involved with the cost of wind energy projects: the complexity of the site such as location and topography. Also the likely extreme loads of the operation. Other important components such as wind resource assessment and site analysis expenses, repair, legal and consultation fees are also used. Project costs will depend on the financing arrangements, the size of your project, and taxes. A very windy site with high extreme loads will result in a more expensive civil infrastructure and a higher specification for turbines. These are all cost components involved in developing, constructing, and operating a large wind project. Certain steps must be taken when developing a large wind farm. Determining the capacity of the wind resource will be a primary factor when calculating potential and future revenues for the project. A comprehensive wind resource assessment for project ranges from $15,000 - $50,000 depending on size of the project and level of detail banks require for study. Wind projects should always be sited in the windiest areas possible to maximize revenue from electricity sales and production incentives. This siting requires obtaining a lease for the land the project will be sited on as well as obtaining wind easements on adjacent land. This is to prevent other projects from being constructed too closely to the project, which would lower its production numbers drastically. The project will need to perform archeological, environmental impact, and other studies before permits to build are issued. The local or state permitting agency may also require other studies and fees. Common permits required are building, conditional, special use, FAA, and access road permits. The local and/or state zoning authority will be able to help you determine what permits the project will need to obtain. Interconnection studies for a project can cost anywhere from $5,000 -$150,000 or more, depending on the size of the project and where you propose to interconnect. Three-phase lines are required for large generators, but you cannot assume that any three-phase line can carry the power from your turbines. In other words you need to check whether the nearby power lines are full or not. Transmission lines are expensive to build and difficult to site. It is imperative to research the interconnection process early in the planning phase because the process can be very time consuming and the costs of interconnecting can be prohibitive for a project. The turbine and tower are the largest expenses associated with the development a project. Current commercial turbines range in price from $1.1 to $1.7 million per MW. Cost varies depending on the size of the project, turbine manufacturer and model, and the distance and method used to transport the turbine and tower to the site. This cost will normally include supervision from the manufacturer at the job site and final commissioning of the project. Today turbine availability is a significant hurdle since supply has fallen short of increasing demand. The record of the wind industry in construction of wind farms is generally good. A wind farm may be a single machine or it may be a large number of machines. The design approach and the construction method will, however, be almost identical whatever the size of project envisaged. Installation costs are the expenses required to construct and get a turbine up and running once it arrives. Most owners hire experienced contractors to prepare the site and install the turbines. Connecting the turbine to the grid is often done through a team effort involving the contractor, reps from the turbine manufacturer, and engineers from the utility company that owns the power lines. Contractors who...
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