ENERGY SYSTEMS: LAB

1
Financial Evaluation of a Wind Farm

LAB GROUP C LECTURER ANTHONY REYNOLDS

October 4th 2016

Abstract
In this lab, the goals were to provide a financial evaluation of a wind farm using
RETScreen4, a software package used for such practices and analyse the results generated by
the software to what the statistics may be in reality and what could be the possible difference
between them. The comparison between the two is also called a plausibility check and
involves such things as checking if the standard efficiency was around the 30% mark, i.e.
realistic to that of a real wind farm. As well as the capacity factor, which can be obtained
using a formula.
Having used the software package and analysing the data, it was found that the data was very
similar to what the expected values of the system were. Further calculations proved this and
the experiment was classified as a success.

Table of Contents
Abstract......................................................................................................................................1
Table of Contents.......................................................................................................................2
Table of Contents.......................................................................................................................3
Background and Introduction.....................................................................................................4
Experimental Techniques...........................................................................................................5
Results and Discussion...............................................................................................................8
Conclusions................................................................................................................................9

Table of Figures
Figure 1 - The project information.............................................................................................5
Figure 2 - Resource assessment and Wind turbine data.............................................................5
Figure 3 - Emission Analysis data..............................................................................................6
Figure 4 - More data on wind turbine........................................................................................6
Figure 5 - The financial analysis data........................................................................................6
Figure 6 The data cash flow analysis......................................................................................7

Background and Introduction

The objectives for the experiment were to financially evaluate a wind farm using the software
package called RETScreen4 and analyse the data to see if the site is suitable for operation.
The software is an excel-based clean energy project analysis software tool that helps decision
makers determine the technical and financial viability of potential renewable energy, energy
efficiency and cogeneration projects. Conventional energy projects can also be modelled and
compared to cleaner alternatives.

To begin with the basics, a wind turbine is defined as a device that produces electricity from
the kinetic energy of the wind. Developed since the early 1900s, it has always been a concept
that people have sought perfect in order to reduce reliance on fossil fuels. As a result, there
have been any advances in the field to designs such as the vertical and horizontal axis
turbines. The efficiency of the turbine can vary due to factors such as number of blades,
blade composition as well as most importantly the location.
To calculate the power in the wind the following formula is used:

1
P= A V 3 . By doing
2

this it can give an idea to such things as the rotor diameter. The turbine is however limited
also by what is called the Betz limit, stating that as not all air cannot be captured by the
3

turbine the theoretical limit of rotor efficiency is 59%. Most modern turbines are in the 3545% range.
Other factors that play into the decision of a wind farm are things such as the visual impact
on the landscape, noise from the turbines and safety to people. However, this has not stopped
the increase in wind farms because as production of the turbines increased over time the cost
of production has decreased with an increase in efficiency and ultimately leading to a
reduction in the cost per kilowatt hour.

Experimental Techniques
For the experiment the procedure was users conducting a five-step analysis, including energy
analysis, cost analysis, emission analysis, financial analysis and sensitivity/risk analysis. To
do this the project information was as follows:

Figure 1 - The project information

Figure 2 - Resource assessment and Wind turbine data
Having
input the necessary basic data for the wind farm, the following information such as the energy
model menu which had sub headings such as analysis type, base case electricity system and
financial analysis.

Figure 3 - More data on wind turbine

Figure 4 - Emission Analysis data

Figure 5 - The financial analysis data

Figure 6 The data cash flow analysis

The graph here shows that the system starts to turn a profit halfway through its 13th year of
the 25 year cycle.

Results and Discussion

With regards to the results generated by the software it was necessary to perform calculations
to prove that the data was similar to the expected values.
1
6
3
Pwind = A V avg
2

6 1
1.225 5,027 7.8 3 =2.8 MW
2

2.8 MW 8760 1,000,000=24,445.8

load =

AEO
P wind
10

8760

6656
=27
2.8 106
8760
106

C . F .=

6656
=0.3799 38
8760

H1 V1
=
H0 V 0

40 7.8
=
10 4.6

=0.381

LCOE=

C o crF +C i=1
AEOi=1

From performing these calculations and comparing them to the values present in the software
the data can be seen to be very close to the original. Taking for example the capacity factor
CF, it is calculated to be 37.99% and the value present in the data is 38%. Showing that these
values are of a realistic nature when making the decision of whether to install the wind farm.

Conclusions
Looking back on the experiment the values calculated using the theoretical method were only
negligibly different to the values presented by the software, proving that the system is capable
of giving an engineer a realistic representation of how the wind farm will operate. For this
reason the experiment can be seen as a success as the goal set out at the beginning of the
experiment was met.