-19-
3. Secure Access to Land
Landowners, both private and public, will expect to be compensated for any
wind energy development that occurs on their land. Royalty or lease
agreements will need to be discussed with all parties involved. Roads,
transmission equipment, maintenance infrastructure, turbines, and the like all
need to be considered. Moreover, the construction of a wind farm necessitates
the use of heavy industrial equipment. Developers will need to invest in roads
capable of accommodating significant weight. To do so will require the
cooperation of landowners and, in some case, the local community.
4. Establish Access to Capital
Building a wind farm is not cheap. On average, wind power development costs
around $1 million per megawatt of generating capacity installed. To take
advantage of economies of scale, wind power facilities should be in excess of 20
MW. Assuming the average turbine is rated at 750 kilowatts (kW) in capacity,
this means at least 26 turbines and an initial investment of $20 million.
(In the first quarter of 2008, 1,479 MW of capacity was added to the U.S.
market from 955 turbines. This averages to 1.55 MW of capacity per turbine.
The average size of the wind projects was 61.6 MW, which would equate to
approximately 40 turbines. Investment costs in wind turbines has risen to over
$2.1 million per MW recently, which would mean that a 61.6 MW wind project
would cost over $129 million)
5. Identify Reliable Power Purchaser or Market
To date, wind energy is the most cost competitive renewable energy option on
the market. In fact, wind energy’s cost has declined so much that it rivals many
traditional power generation technologies. However, utilities will tend to
purchase power from what they consider to be the cheapest and most reliable
technology. In most cases today, that is natural gas. That does not mean there
is not a market for wind, though. Demand for “green power” (electricity from
clean sources like wind that is sold to customers at a premium price) and
environmental requirements are creating buyers for wind energy and competitive
rates. Before investing thousands of dollars into wind resource assessments,
permitting, and pre-construction activities, a developer will secure tentative
commitments from one or more buyers for the wind plants output over 10 to 30
years of its operational lifetime.
