Wind turbine performance
& wind project finances

Energy is everything; you can sell energy, but you can’t sell power (at least not in the context of wind power!) People often get obsessed with wanting the highest possible power output from a wind turbine, but this is really quite irrelevant. When you sell electricity you are paid depending on the number of kWh (kilowatt-hours) you sell (i.e. based on the energy) and not for the power you produce. Energy is the capacity to do work, while power is the rate at which work can be done. It is a bit like miles and miles-per-hour; the two are clearly related, but are fundamentally different.

The amount of wind energy that can be generated depends mainly on the size of wind turbine and the annual average wind speed at the site. There are some other factors that affect energy capture such as nearby hills, trees and buildings (or other wind turbines) that could obstruct the wind, and the efficiency of the wind turbine itself. Assuming your turbine has been well sited and is from a good quality manufacturer the most important factor will be the annual average wind speed.

The table and chart below shows the annual energy production in MWh for a range of turbines. Note – the 100 kW turbine is the smallest scale that we develop.

Wind turbine annual energy generation

Note: The EWT DW 61 wind turbine is a ‘Class 3’ wind turbine, meaning it is limited to an annual average wind speed of 7.5 m/s.

The estimates are based on real manufacturers’ power curves, assume a Rayleigh wind speed distribution and include an availability factor of 0.95 (i.e. we have allowed for 5% of the time for maintenance downtime, which is conservative).

Note that for multiple-turbine sites just multiply the figures above by the number of wind turbines you are considering. For your site there may well be turbines from other manufacturers that we would consider, so please don’t assume that these are the only turbines that we work with (though they are all very good quality machines).

Note that really accurate wind energy production estimates require accurate wind data measured at the site and a lot of modeling on specialist wind software (we use Windfarm), but the figures above are a good starting point for initial site appraisal estimates.

You’ll notice that the annual wind energy production from the wind turbines increases disproportionately compared to the increase in annual mean wind speed; for example an increase in annual mean wind speed from 6.5 to 7.0 m/s is an 8% increase in wind speed, but the corresponding increase in annual energy production is around 14%. This is because the power output of a wind turbine is proportional to the cube of the wind speed and demonstrates how fundamentally important it is that wind turbines are located where the local wind speed is at its maximum.

 

The amount of wind energy income available is complicated. There are up two main components that make up the total value of electricity generated, namely:

• Export value
• Offset value for energy used onsite

Import and export electricity prices are notoriously very difficult to forecast, especially in current times with highly volatile pricing during the energy crisis. Both import and export rates could vary considerably from the values we have assumed in this report as a result. For the purposes of this financial assessment, we have therefore had to made a number of assumptions based on the information we have at the current time. The following explains the reasons behind our assumptions, and their limitations.

Import Rates

To a certain extent, import prices may have a certain correlation between the wholesale generation rates, and end user selling rates, but even these relationships can be skewed by the impact of long-term contracts and government subsidises.

Cornwall insight is an independent energy research, analytics and energy forecasting firm. They publish a quarterly electricity wholesale price forecast. Their current forecast is shown in Figure 1. This shows their forecast for wholesale electricity generating prices between now and the end of the decade. The current key drivers of this forecast are:

• Gas prices have plunged thanks to high European gas stocks at the onset of winter 2023-24 combined with a milder than expected season lessening demands to refill storages again over summer. As the GB power price is highly dependent on the gas price, both the summer and winter prices have dropped significantly from our Q4 2023 forecast.
• Prices continue to decrease over the horizon as higher marginal cost fuelled technologies are displaced by new renewables including solar, onshore, and offshore wind. The low marginal cost of renewables means that when they are generating, prices tend to fall.
• The deployment of low marginal cost generators is met by demand growth from the electrification of the economy, increasing production of green hydrogen and increased power exports to Europe, resulting in a levelling of prices above pre-pandemic levels.
• Delays to Hinkley Point C pushes its expected deployment to post 2030. This results in more imports from the continent and a slight increase in the summer prices mid-horizon. In the last Cornwall Insight report, the wholesale price in the Winter of 2023/2024 was estimated to be approximately 120 £/MWh.

The actual energy price per unit at this time, based on the latest Ofgem energy price cap, was 24.5 p/kWh. By comparing the actual retail price of electricity to the wholesale price, a multiplication factor was obtained to relate wholesale price to end user price. This factor was then applied to the Cornwall Insight wholesale forecast up to 2030 to obtain an estimate of the end user electricity price up to 2030. Using this method, a retail rate of 24 p/kWh has been assumed for 2026.

There is a lot of uncertainty regarding the wholesale price in this forecast, compared to previous forecasts, and a wind turbine project being assessed at this stage would not be operational until at least 2026.  By simplifying the above trend, it has been assumed that electricity prices will decrease annually by 4% up to 2031, and beyond 2031 they will increase with the current inflation trend of 5%.

Export Rates

Forecasting export rates is extremely difficult and the values have little relationship to the wholesale power generation market. These rates are very dependent on scale, generation type, location in the country and the number of bidders that want to agree a contract for a particular site. We can therefore only assume typical current rates that may be achievable, and assume that they will vary according to the trend described above. In reality, export rates can vary considerably from the assumptions in this report so export assumptions are for guidance only.
Based on the latest PPA rates available, an initial rate of 8 p/kWh has been used. In reality these figures are indicative only based on the previous assumptions.
In summary, the financial modelling has used the following parameters and presumptions:
I. The turbine is operational from 2026.
II. 2026 import electricity price is 24 p per kWh.
III. 2026 export power purchase agreement price is 8 p per kWh.
IV. Import and export price will decrease by 4% annually up to 2031.
V. Import and export price will increase by 5% annually from 2031.
VI. The annual inflation is 2%.
VII. Grid connection cost is estimated and is based on the installed capacity.

Effective income for 100 % onsite energy consumption

If it is not possible to consume any electricity onsite, then 100% of the electricity must be exported to the grid. In this scenario the net income could be:

Effective income for 100% energy export to the grid

Clearly the net income prediction is complex, is very site specific and is dependent on unknown factors within the electricity market, however the most profitable schemes are those than can consume the most amount of generated electricity onsite. Site specific income needs to be assessed carefully based onsite conditions and assumptions which will be completed as part as part of a Wind Feasibility Study.

Also worthy of mention, many windpower sites generate a great deal of positive publicity and ‘green credibility’ through association with clean renewable energy generation. Sometimes the value of this is greater than the revenue generated by the system, but because of its non-tangible nature it has been ignored here.

To see how this translates into a return on investment you need to consider what the project will cost and what wind turbines cost to operate, then the return on investment can be calculated. The big unknown is whether you will successfully obtain planning consent, and there is always a risk that you won’t after spending a substantial sum on the planning application. This is why a good quality wind feasibility study is required, which although it won’t remove the risk of an unsuccessful planning application entirely it will analyse the myriad issues in a structured way and enable you to make a well-informed decision on whether to commit to a planning application.

The total project cost will depend on many factors, including the cost of the turbine itself, the extent and scope of supporting environmental work for the planning application, the cost of any electrical distribution network (‘grid’) upgrades and the cost of site works including access roads, foundation and cabling costs.

There are economies of scale so larger turbines cost less per kW-installed than smaller ones, and single turbine sites costing more per kW than multiple turbine sites. Having said all of that, a reasonable conservative budget price for the ‘example’ turbines used throughout this webpage would be:

Typical wind turbine project cost

All of the major wind turbine manufacturers offer long-term warranty and maintenance packages for 5 to 15 years (depends on turbine size and manufacturer) which we would always recommend using. The other significant cost to operate wind turbines to consider are business rates and insurance.

There are all sorts of subtleties to how these costs are calculated, but at a very basic level the table below will give a good indication of the Operation and Maintenance (O&M) costs for a single wind turbine. For multiple-turbines just scale-up the figures below.

*O&M = Operating & Maintenance

The Return on Investment of a windpower scheme depends on the net income received and the capital costs of the project.

The approximate Rate of Return for two scenarios are shown below :

Typical return on investment for 100% onsite energy consumption

 Typical return on investment for 100% energy export to the grid

Clearly the potential return on investment is very good especially if energy can be used onsite, but always remember that wind projects can take two to three years to deliver and that there is no guarantee that a project will succeed until planning consent has been obtained.

The first step for any wind project is a good quality wind feasibility study which will analyse everything in detail, identify any potential project risks and recommend the best way to proceed with the project.