Economics of Wind Farms

• Turbine Cost

As the power of a machine increases, its price doesn't increases proportionally. As example, a 600kW machine costs about three times more that a 150kW machine thanks to economies of scale. For example, the manpower, the safety measures and the electronics involved to build a 150 kW machine is not very different from what is required to build a 600 kW machine. 

The average price for large, modern wind farms is around 1 000 USD per kilowatt electrical power 
installed. 

• Turbine Installation

Installation costs of a wind turbine include foundations, road construction (capable of carrying 30 tonne trucks), a transformer, a telephone connection for remote control and surveillance of the turbine, and cabling costs.

Obviously, the costs of roads and foundations depend on soil conditions. Other important factors are the distance to the nearest ordinary road and the distance to a power line capable of handling the maximum energy output from the turbine. 

Transportation costs for the turbine may also enter the calculation if the site is very remote.

As they exist for the turbine cost, some economies of scale also exist for the turbine installation. It is obviously cheaper to connect many turbines in the same location, rather than just one. But on the other hand, the output the local electrical grid can handle is limited, so if the local grid is too weak, there may be need for grid reinforcement.

• Operation and Maintenance

Modern wind turbines are designed to work for some 120 000 hours of operation throughout their design lifetime of 20 years, which is far more than an automobile engine which will generally last about 5000 hours. 

Economies of scale in the operation of wind farms rather than individual turbines are related to the semi-annual maintenance visits, surveillance and administration of the farm. 

Generally, wind turbines are designed to last 20 years. The actual lifetime of a wind turbine depends on the quality of the turbine but also on the local climatic conditions.

The 20 year design lifetime is a useful economic compromise and components of a turbine must have a very small probability of failure before 20 years. 

It can be added that offshore turbines generally last longer, due to low turbulence at sea. 

• Employment

The wind industry is a very fast growing industry which employs tens of thousands of people worldwide, from people involved in the manufacturing of components for wind turbines to people directly working on wind farms.