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Resource Analysis. Objectives of Resource Assessment Discussion. The subject of the second part of the analysis is to dig more deeply into some of the issues discussed earlier. For example, we : Understand what factors are important and not very important in cost and benefit analysis
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Objectives of Resource Assessment Discussion • The subject of the second part of the analysis is to dig more deeply into some of the issues discussed earlier. For example, we : • Understand what factors are important and not very important in cost and benefit analysis • Further elaborate on risk analysis • Evaluate tax benefits in different scenarios • Consider alternative structuring issues
Wind Studies • The first step for the project lenders is to conduct an in-depth analysis of the owner's feasibility study and possibly even hire a consultant to conduct an independent feasibility study. Such studies will analyze the wind resource data and should demonstrate the financial viability of the project. These studies will detail technical, financial and other aspects of the project and are crucial to the lender in its risk assessment of the proposed project. • Independent Engineers compute the probability of different wind availability. However, these studies are based on the wind measurements for previous years and for a particular site, and while the studies accommodate the fact that the year in which the measurements were taken may have been a particular good or bad year, there is no guarantee that there will not be substantially less wind in the future. • Off-taking utilities are largely able to mitigate this risk because it is possible to get very accurate wind forecasts, which enables alternative sources to be used in order to maintain grid stability and supply if necessary. For the project itself, however, no wind means zero cash flow. • Such risk could, in theory, be hedged or covered by insurance, and while some attempts have been made in that respect, such tools are not yet a common feature and thus remain a risk which has to be factored in.
Wind Speed Risk • A potential and significant risk for any energy project is the underlying resource for its generation – in this case wind. Identifying the availability of wind is paramount. This has two aspects. • The first is the question of whether a particular site has sufficient wind speeds. This issue is addressed by the lending banks insisting on long-term – usually at least 12 months – wind measurements, which are then used as the basis for a number of wind studies. Banks usually insist on at least two of those coming from reputable wind experts. These wind studies give an estimate of the annual electricity output of a project, based on a probability curve, usually 75% or 90%, that the project will generate x number of full load hours. Depending on the wind turbine used, there is therefore a 75% or 90% respectively, probability that the turbine will generate y kW/h per year when in service.
Value of Renewable (Wind) on Market Basis • Assumptions • Wind Power Curve • Wind Capacity Factor • Wind Capital Cost • Net Energy Value of Wind • Required Subsidy
Source of Wind Data • www.knmi.nl • http://www.kma.go.kr/kor/weather/climate/climate_03_01.jsp?a=0&b=20&c=1&pop=temp_avg_135-2004.htm • CONSULT THE REPORTS AT THE SITE: • http://www.knmi.nl/samenw/hydra • http://www.ndbc.noaa.gov/station_history.phtml?station=41018 • http://www.ndbc.noaa.gov/station • http://lwf.ncdc.noaa.gov/oa/ncdc.html
Capacity Value of Wind • Assume to Production Cost Runs with the same amount of non-wind capacity, except that one case has some wind capacity • 1. Without Wind • 2. With Wind • The LOLE in the second case will be lower than the LOLE in the first case because in some high load hours, the wind farm will be running and lower the net load requirements for the other units. • The value of wind could be • LOLE reduction x Cost of outage • Eg • .000001 x 10,000 Won/kWh
Weibull Distribution • In excel, =weibull(Wind Speed,C Factor (e.g. 2),Avg Speed/.89) • X = wind speed • K = Average Wind Speed/Gamma Factor = Average Wind Speed/.89 • C = 2
RetScreen Reconciliation • Total energy delivered after losses and adjustments is 100,565 MWH • Capacity Factor is • Average Generation:100,565/8760 = 11,480 • Divided by 40,000 • Equals 28.7%
Start with Monthly Wind Speeds • Before Working with the Power Curve and the Weibull distribution, adjustments to the wind speeds for height and wind density should be made:
Compute Month by Month Wind Speeds • This table illustrates how the unadjusted wind speeds are adjusted
Use the Weibull Distribution to Compute the Average Hourly Output by Month • This example shows the calculation for the first month. The index function can be used for the same calculation in other months
Compute Total Production for Each Month • Compute the total production for one turbine for one year before adjustments for losses etc. using data table function in excel
Alternative Use of Weibull • Required Inputs
Preliminary Calculations • This shows some calculations that are necessary
