© 2018 by Environmental Energy Institute

YR21

Investment Decision Support for Commercial Wind Energy

The Canadian Wind Energy Industry is maturing as wind has moved from the margins to the mainstream in the energy supply mix.  Over the last few years, many Canadian wind farms have been enjoying the bottom of the bathtub reliability curve; as many sit near the middle of their originally cited, 20 year life span.  Further, many owners had purchased extended warranties from their manufacturers that minimized involvement and significantly simplified investment decisions.  However, in 2019 many farms are coming out of extended warranty coverage, and other owners that have been already operating without warranty are seeing the significance of their business decisions spike.  Major components like blades, gearboxes, pad mount transformers, etc. are failing far earlier than anticipated.  In many cases, original maintenance budgets are not sufficient to address these issues.  With the end of original Power Purchase Agreements on the visible horizon for some farms, owners are in need of a tool to help them assess the potential value of major farm investments.  These decisions will be based on a number of factors that include physical condition of the assets, insurance policies, local social climates, and uncertain regulatory and market futures.  In this work we will develop a tool to provide wind farm investment decision support. This will come in the form of financial valuations of potential investments in an operating wind farm.  This requires that the present intrinsic value of the farm be assessed in addition to how this value will be influenced by the potential investment.