Wind Energy Feasibility Study - Town Of Orleans

Wind Energy Facility Economic AnalysisTown of Orleans, MAcompiled for 89 wind projects installed in the US between 1982 and 2005 were reviewed by theNational Renewable Energy Lab in Berkley, CA. The annual cost for operation and maintenanceof a wind turbine varies from approximately $25 to $40 per kilowatt nameplate capacity. TheU.S. DOE, in its Annual Report on U.S. Wind Power Installation, Cost, and Performance Trends:2006, published in May of 2007, suggests a range of 0.02 to 0.04 cents per kWh for larger scalewind farms. Little data is available for small scale wind turbine projects. Weston & Sampsonconservatively estimates that the annual operation and maintenance costs for a 600 kW turbinewould be on the order of $24,000 annually, or $40 per kilowatt nameplate capacity.4.5 Insurance RequirementsGrid-connected distributed generators, including wind turbines, are required to carry insuranceunder Department of Public Utility (DPU) requirements. Insurance limits, which are subject tochange from time to time, are based on the nameplate capacity, where $5M in general liability isrequired for 5 MW or greater; $2M for facilities with greater than 1 MW, but less than or equalto 5 MW; $1M for greater than 100 kW, but less than or equal to 1 MW; and $500,000 in generalliability coverage for generators of 10 kW up to 100 kW. No statutory insurance is required forgenerators less than 10 kW. Insurance is to be issued by a MA-licensed insurer having an AMBest rating of “A-”. In similar interconnection applications, NSTAR has offered to provide therequired insurance at a rate of $8.75 per kW. The cost of providing insurance for a 600 kWturbine would therefore be $5,250 annually.Additional long-term costs, including principal and interest payments for financing of theproject, annual operation, maintenance, service agreements, escrows for decommissioning andmajor equipment parts replacement and insurance costs are considered in the business modeleconomic evaluation discussed in the following sections.22