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Measurement of Risk for Wind Energy Projects: A Critical Analysis of Full Load Hours

André Koukal (), Stefan Lange () and Michael Breitner ()
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André Koukal: Leibniz Universität Hannover
Stefan Lange: Leibniz Universität Hannover

A chapter in Operations Research Proceedings 2013, 2014, pp 255-261 from Springer

Abstract: Abstract In scientific literature, profitability analyses of on- and offshore wind energy projects and assessments of general conditions for such projects usually make use of the full load hours (FLH) key figure to determine the annually produced energy. They also serve for the calculation of the project value and other financial key figures. This procedure leads to accurate results if only the expected value of each parameter is taken into account. However, it is difficult to choose an adequate type of distribution and to define suitable distribution parameters for the FLH when project risks are considered. In this paper, a different approach using the more basic parameter of the average wind speed and a Weibull distribution in combination with the technical availability and other discounts is provided. It aims at estimating the annual electricity generation by simultaneously taking uncertainties into account. This approach is integrated into a discounted cash flow (DCF) model on which a Monte Carlo simulation is applied. Finally, a case study for a fictitious offshore wind park in the German North Sea is conducted. It is shown that the application of the presented approach leads to more precise distributions of the outcomes than the standard analysis with FLH.

Keywords: Full Load Hours (FLH); Offshore Wind Parks; Technical Availability; Wind Energy Plants; Project Value (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-3-319-07001-8_35

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