engleski

Economic evaluation of wind power projects

Investments in any kind of power plant in open market conditions are, in the bottom line, governed by the idea of making profit. The same goes, of course, for RES-e projects. They are aimed at gaining profit through sales of electricity delivered to the power grid. Thus, it is clear that RES-e project, as any other project that requires capital investments, needs to be evaluated according to its economic characteristics. In order to perform economic analysis of a possible project, all expenditures and revenues coming from the proposed project should be evaluated. Based on the assessed annual expenditures and revenues, the project cash flow analysis is performed and relevant profitability indicators are calculated, which are then are used as a basis for decision making process. Special attention in this paper is given to the wind power projects. The wind power plant expenditures include investment costs, operation and maintenance costs, costs of capital, depreciation and income tax. Also, additional expenditures for grid connection should be included in the analysis. The wind power plant revenues include financial gains from electricity sales to the power grid. Thus, it is necessary to determine possible electricity production from the wind power plant according to the data on the utilizable wind potential at the chosen micro-location. The paper will point out that especially important parameter for cost effectiveness of wind power project (i.e. RES-e projects in general) is guaranteed purchase price for produced electricity. Namely, renewable facilities are very capital intensive and for that reason the price of electricity produced is in most cases still higher than the price of kWh from conventional facilities. This paper covers all previously mentioned issues. The economic evaluation of the possible wind power project WPP Stupisce on the island of Vis, proposed within the Croatian national wind energy programme ENWIND, is shown in order to support theoretical findings and point out the main issues in economic evaluation of wind power project.

wind power; economic evaluation; cash flow

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