Wind Farm Economics

Abstract

The economics of wind energy are changing rapidly, with improvements in machine performance and increases in size both contributing to reduce costs. These trends are examined and future costs assessed. Although the United Kingdom has regions of high wind speed, these are often in difficult terrain and construction costs are often higher than elsewhere in Europe. Nevertheless, wind energy costs are converging with those of the conventional thermal sources. At present bank loan periods for wind projects are shorter than for thermal plant, which means that energy prices are higher. Ways of overcoming this problem are explored. It is important, also, to examine the value of wind energy. It is argued that wind energy has a higher value than energy from centralized plant, since it is fed into the low-voltage distribution network.