In Defence Of Wind Farms
May 6th, 2009
Meridian Energy’s West Wind farm began turning last week, with the blades of the 62 turbines reaching skywards to catch the nation’s most consistent winds, channeled by Cook Strait. Before the week was out, the economics of the wind farm were being questioned. The Dominion Post opined the project was “seriously, outrageously expensive,” saying the cost equates to about $3m for each installed MW of power. Is this correct? Meridian’s wind manager Adam Muldoon says “as an approximation, yes. But we factor in the whole life cycle of the power station. Annual revenue more than satisfies versus that capital cost.”
NZ has about 325MW of installed wind capacity, or 4% of the total market. There’s no doubt costs soared since earlier farms, a combination of rising commodity prices and demand for turbines. Since then, the recession has crashed down on prices. Steel, which makes up 80-85% of a turbine, has halved in price. Shipping costs have fallen. Muldoon says West Wind is the benchmark Meridian will measure future wind projects by. “One of the interesting things people forget about wind versus thermal. Its short-run marginal cost is just maintenance, zero, versus thermal with its ongoing gas costs.”
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