WIND ENERGY SYSTEMS - Cd3wd

Chapter 8—Economics 8–20
L ′ fuel =(9.5)(1.886) = 17.92 mills/kWh
The present value of the fuel consumed for each kW of rating is, from Eq. 17,
The OM costs are
P v = 106.73
0.1(1.1) 30
(1.1) 30 − 1
= $1006.13/kW
L ′ fom = $3.00 (1.886) = 0.95 mill/kWh
5957
The total levelized cost per kWh is then
L ′ vom =(1.10)(1.886) = 2.07 mills/kWh
L ′ =27.2+17.92 + 0.95 + 2.07 = 48.14 mills/kWh
The present worth of the coal is actually greater than the present worth of the plant. However,
the revenue requirements necessary for the coal are less than for the plant because expenses such as
profit and taxes are not allocated to the fuel.
4 VALUE OF WIND GENERATED ELECTRICITY
We have shown that wind generated electricity has value both from capacity displacement
of conventional generation and from saving fuel. A capacity credit can only be given if the
construction of the wind turbine actually prevented some conventional generation from being
built. The fuel savings mode can always be applied, even when conventional generation is not
affected.
Utility companies are faced with many options when planning new generation. Two of the
more common options would be to use wind generation to displace new coal generation or to
save oil at existing oil fired units. New oil fired units are not being built because of fuel costs,
so wind generation cannot displace these. If wind generation is displacing coal generation,
then it cannot save oil at the same time. Both options need to be examined by the utility.
We shall now illustrate the use of the various economic tools which have been developed
by two lengthy examples. We basically want to know if wind generation is economically
competitive with either new coal construction or existing oil generation.
Example
Wind Energy Systems by Dr. Gary L. Johnson November 21, 2001