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Deriving the Real Cost of Wind Power

Mr Bryan Leyland


For a number of reasons, it is not easy to calculate the real cost of adding a substantial amount (say greater than 10%) of wind power into the New Zealand system. This study derives the cost at the station gate and, what is more important, the overall cost to the consumer.

The cost of wind power at the station gate is difficult to estimate because it is not easy to get reliable published information on the cost of the wind turbines, generators, towers and the electrical equipment and the cost of civil works and installation. A few years ago reasonably good data on this was available from sources like the Energy Central Newsletter[52] but, in the last year or so, there has been virtually no information on costs from this source.6

Data on operation and maintenance costs is equally difficult to find. I have managed to collect some costs that I believe to be reasonably accurate as of two or three years ago. I have not seen any recent credible data. There is considerable anecdotal evidence that operation and maintenance costs are quite high due, in the main, to continuing problems with gearboxes, blading, bearings and other major and expensive components. One of the reasons for the high operation and maintenance costs is that it is necessary to hire a crane rated at something like 250 tonnes to lift a 10 tonne module off a tower that is about 100 m high.

The costs I have derived are based on investigations that I carried out while acting as an expert witness for people who were opposing wind farms in New Zealand.[94,96,88,59,104] My cost data was not seriously challenged. In one case, the developer (possibly inadvertently) confirmed that my cost estimates were in the same range as theirs.

Determining the costs of wind power generation

The most important cost is the capital cost of the wind farm itself. The capital cost can be broken down into preliminary costs, the overseas costs of manufacture, shipping the turbines and associated equipment, and onsite costs such as preliminary studies, civil works, roading and cabling between the individual turbines and the central point where the wind farm is connected to the grid...

6 One possible explanation is that the costs are embarrassingly high and the developers do not want the consumers and taxpayers to know just how expensive the wind farms actually are.


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