Levelized Cost of Energy Analysis of a Wind Power Generation System at Búrfell in Iceland

Birgir Freyr Ragnarsson, Gudmundur V. Oddsson, Runar Unnthorsson and Birgir Hrafnkelsson
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Birgir Freyr Ragnarsson: Faculty of Industrial Engineering, Mechanical Engineering and Computer Science, Centre for Productivity, Performance and Processes, University of Iceland, Hjardarhagi 6, Reykjavik 107, Iceland
Gudmundur V. Oddsson: Faculty of Industrial Engineering, Mechanical Engineering and Computer Science, Centre for Productivity, Performance and Processes, University of Iceland, Hjardarhagi 6, Reykjavik 107, Iceland
Runar Unnthorsson: Faculty of Industrial Engineering, Mechanical Engineering and Computer Science, Centre for Productivity, Performance and Processes, University of Iceland, Hjardarhagi 6, Reykjavik 107, Iceland
Birgir Hrafnkelsson: Department of Mathematics, Faculty of Physical Sciences, University of Iceland, Reykjavik 107, Iceland

Energies, 2015, vol. 8, issue 9, 1-22

Abstract: Wind energy harnessing is a new energy production alternative in Iceland. Current installed wind power in Iceland sums to 1.8 MW, which in contrast is 0.1% of the country’s total electricity production. This article is dedicated to the exploration of the potential cost of wind energy production at Búrfell in the south of Iceland. A levelized cost of energy (LCOE) approach was applied to the estimation of the potential cost. Weibull simulation is used to simulate wind data for calculations. A confirmation of the power law is done by comparing real data to calculated values. A modified Weibull simulation is verified by comparing results with actual on-site test wind turbines. A wind farm of 99MWis suggested for the site. Key results were the capacity factor (CF) at Búrfell being 38.15% on average and that the LCOE for wind energy was estimated as 0.087–0.088 USD/kWh (assuming 10% weighted average cost of capital (WACC)), which classifies Búrfell among the lowest LCOE sites for wind energy in Europe.

Keywords: wind energy; levelized cost of energy (LCOE); annual energy production (AEP); modified Weibull; Iceland (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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