So, how good is the wind farm you are working at?
There are several parameters that can be used to assess a renewable energy project and to compare different projects.
Among the most used, it is worth mentioning the Capacity Factor, NPV, IRR and LCOE.
It is basically function of two parameters, wind variability and wind turbine selected for the project. On top of that you will have several losses - for instance electrical losses, noise curtailment, wake losses, etc.
To calculate it you will simply divide the energy produced by the wind farm by the nameplate capacity by the number of hours. Due to the seasonal variability of the wind it makes sense to make an yearly calculation.
What is interesting is that Capacity Factor is fundamentally and economical decision. At the end of the day you want to improve your business case, so it could make sense to install wind turbines giving a lower capacity factor (but with an even lower total cost).
The Net Present Value (NPV) is today’s value of a future cash flow.
This metrics give priority to the absolute return of the investment. Basically it is useful if you have only one shot: if you put all your money in a single project you will prefer (ceteris paribus) the one bringing more money.
The discount rate reflect the fact that money in the future is worth less than money today – for inflation, cost of opportunity, etc.
Internal Rate of Return (IRR) is the discount rate that makes NPV = 0.
This metrics give priority to the percentage return. It could be useful for instance if you can pick several projects among many.
Levelized Cost of Energy (LCOE) is defined as (CAPEX + OPEX ) / AEP
CAPEX (Capital Expenditure) is the money that the wind farm developer will have to put in all the assets – not only the wind turbine itself but also the infrastructure (roads, foundations, substation, etc.), and the development costs (everything from land lease agreements to the engineering studies).
OPEX (Operational Expenditure) is what the wind farm owner will spend to have the wind farm up and running.
This include basically the maintenance of the wind turbines (they need new oil every now and then, pretty much like your car) and of the substation equipment. As the lifetime of such project is increasing from what used to be industry standard (20 years) to 25, 30 years and more.
Additionally the more the wind turbine gets older the more is likely that it would need major maintenance (for instance a new gear box).
LCOE makes a lot of sense when you are trying to compare energy produced by different technologies, for instance wind and solar photovoltaic.