The feasibility and profitability of a wind farm, proposed to supply the island town of Lowton with electricity

The following report investigates the feasibility and profitability of a wind narrow forward, proposed to supply the island town of Lowton with electricity.Using cost-benefit synopsis techniques including spreadsheets formulated development Microsoft Excel the validity of the potential verbal expression (15 turbines) was established.The Results (including equations formulated) argon available in table format in the Presentation Of Results section (p 7).Other factors, including the difficulties convoluted in the environmental decision-making lick are discussed, for example the difficulties surrounding applying a monetary foster to natural options, befoulment levels and visual intrusion.The strengths and weaknesses of the decision making process are toweringlighted.Environmental concerns and the importance of create secondary null sources are discussed.The report concludes that the construction of the proposed wind farm should go ahead, and that it could be a profitab le enterprise.IntroductionThis report is to investigate and appraise the environmental mend of a potential wind farm for the small island town of Lowton, while assessing the profitability and feasibility of this.The island is inhabited by grounds residents and soon has strength supplied by a conventional function plant on the mainland, which owns a 650 watt electrical military force station.The wind farm in question would be small (about 15 turbines) which would be expected to religious service the town for 20 years each(prenominal).The adjacent cost of constructing and installing the turbines would be 1 million per mega watt (MW) and the potential out shed should be reached by the end of the second year.The cost of the fuel replaced by the wind power creates a saving of 25 per MW hour. Due to the fact wind is an rumbustious phenomenon it is non available 100% of the time. The potential availability is estimated at 50%A spreadsheet shall be devised using Microsoft excel i n order to fructify the financial benefits/losses.The possible environmental impacts shall also be discussed and weighed up, using righteous and financial arguments.Aims & ObjectivesThe aims and objectives of this report are to assess the profitability and feasibility of the construction of the proposed wind farm.Economic modelling skills shall be used to create and let off a give the axeed cash flow model.A brief environmental impact assessment shall be created along with a discussion of environmental military rank techniques.Background To StudyThe town of Lowton lies on a small island in two miles into the English Channel. It is not densely populated having only 1000 residents- therefore does not watch a high de musical compositiond for power.The latest situation sees the electricity being supplied by a local power comp whatever on the mainland via undersea cables. The company in question have a 650 MW conventional power station.The cost of constructing and implementing th e 5MW wind farm would be 1 million per MW at the start (year 1) and would be subject to by and by discounts due to the low maintenance be of the turbines.The cost of the wind power would save 25 on coal per hour.MethodologyThe primary supplied info was entered into a Microsoft excel spreadsheet ( slap-up cost, capacity in MW, wind efficiency levels, capital re contributements, discount rate, MW per hour of turbines, compared with the cost per MW hour of turbines and conventional generators.The NPV function, found in f- financial section- was used and the appropriate formulas were input. (Supplied on spreadsheets)In addition to the above information sheets issued by the Department of Trade & Industry were studies for further information.The spreadsheet was and so altered to demonstrate the manner in which a variation in wind efficiency may bushel the NPV, should the turbines be less sound than anticipated.Presentation Of ResultsDiscussion & epitome Of ResultsThe results show the potential wind farm to be a profitable project. The discount rate is used in long term projects to reflect the fact things are worth much in the gratuity than in the future so it is the opposite of compounding.30% was decided to be the efficiency rate in the sensitiveness analysis, as it is possible that a wind farm that operates on full travel 50% of the time to have an annual output of 30% efficiency. race are impatient and would rather be instantly rewarded for something than wait to be rewarded in the future, even when this cerebrates sacrificing potentially larger gains for smaller immediate ones. This is basically human nature as the future is uncertain. A someone may die for example, or shares/projects may collapse before the upper limit potential is obtained.The cost of long-term investment also means a persons financial resources are tied up so unavailable for other(a) purposes.Discounting can also be accused of belittling future benefits and the way it asks peop le to sire personal decisions based on their own determine about public corrects closes off public debate.Cost benefit analysis (CBA) should also be used for determining the worth of a project. It should not merely be a financial decision when ruffianly to hold dear resources/phenomenons (e.g. habitat) are involved. This raises moral and ethical questions.It is incredibly impregnable to attempt to put a value on human life. One way in which economists do this is by paying wages at levels which reflect the venture of the job involved e.g. soldiers earn more than teachers due to the extremely high jeopardizes associated with being sent into battle.Rather than place a value on the individual it is meaned more sensitive to see it in terms of fastening the morbidity rate e.g. discovering how much a household give pay to down pollution levels, which would save lives each year. Studies have shown that by in the raw pollution levels by 26.570 GWH may reduce deaths by as many a nother(prenominal) as 80.Many other factors are almost impossible to put a price on, e.g. visual intrusion, noise levels.CBA does offer the opportunity to bring forth the costs and benefits of potential developments into the decision-making framework (as the name would suggest) and provide a precident- a way to approach environmental problems from a solid standpoint. It also allows sensitivity analysis to be conducted to establish variations in assumptions. It is a transparent process that allows outsiders the chance to see how a decision has been made.The downsides of CBA, up to now, include the fact that it has to assign a cash value to a natural/environmental phenomenon. on that point is a possibility the process may be miss-used to promote a political decision as opposed to promoting a neutral fact-finding /objective standpoint, as the results of the Pevensey Levels exercise in Sussex illustrated.Cost & care for Of sophisticate EnergyThe cost of wind energy is dependant on the initial cost and productivity of the turbines. In this case it is 25 per MW hour. Installation costs may be covered relatively quickly in a successful case due to the low maintenance costs and 20-year spirit of each turbine.The annual output of the turbines, however, is dependant on the position and mean wind speed of their erection site, which directly affects the cost of electricity per unit. in spite of the fact the proposed site is expected to reach its full potential 50% of the time (meaning the annual output may be the equivalent of running(a) on full power 25-30% of the time) the supply tends to peak with demand, e.g. in the phantom windy winter months when there is more demand for heating and lighting.Although exemplary wind farms produce 2-3 times less power than conventional plants they are environmentally friendly, sustainable and low maintenance in comparison.The government is currently trying to get on the switch from conventional power plants to alternatives. It established the NFFO (Non-Fossil fire Order) in 1991-1998 that is now being succeeded by NFFO2- the aim of which is to subsidise and diffuse the use of sustainable resources until they are in a position to get by with conventional and more traditional ones. The success of this scheme depends largely on the ever-volatile energy market.THE PRICE OF PROGRESSION?Due to the fact many benefits of sustainable power sources are long term it can be hard to interest investors. It is also hard to put a monetary value on factors such as pollution reduction, human life or the loss of wilderness land/habitat.PUBLIC SAFETYAny man made product has a risk of malfunction but the risk from a wind turbine is considerably less than that of a plane or car engine etc. Coupled with the fact they are normally situated far from housing/roads the chance of receiving physical tarnish from a turbine is minimal.Despite the fact it is possible for a rotary brand to become detached in high winds nobody has ever been injure by one, and it is un promising a person would be nearby in such bad weather conditions.Environmental ImpactsRISK TO WILDLIFEThere is dwarfish risk to wildlife posed by wind farms. They produce petty noise, and studies do not show them to disturb wild animals. Farmers can even place livestock up to the base of the turbinesBirds may be slightly at risk of flying into the turbines, but they are no more believably to do this than they are likely to fly into conventional power pylons or be hit by aircraft/road vehicles.Local wildlife is indeed likely to benefit from the construction of a wind farm, through the cuts in pollution levels and subsequent rise in air quality.LOSS OF WILDERNESS sphereA method known as the Clawson Method is used to assess the monetary value of a wilderness area. It is also called the Travel-Cost Analysis.Visitors to a site in question will be interviewed to establish how far they have traveled to reach the area, from five graded zones sur rounding the site. Figures are then derived from each 1000 visitors and the travel cost is considered to be the cost of their visit.This method however fails to look at the land as a future resource or take account of habitat/rare species living there. every(prenominal) the above factors need to be addressed along with our need to cut toxic emissions and pollutants from industry, plus preserve dodo fuels. Despite the fact that developing alternative energy sources in the short term is unlikely to be immensely profitable it is another step towards a sustainable home(a) grid.Consumer ObjectionsA BLOT ON THE LANDSCAPE?Some people consider wind farms to be intrusive, and complain about the sights/sounds emitted. This depends greatly on the positioning in question-most farms are built far from urbanised land or other developments, sights of national beauty or very popular inexpert ground.There is little that can be done at present to alter the appearance of the turbines.Very little n oise is produced, so little even livestock appear unconcerned. Manufacturers are nevertheless working to make them even quieter.PUBLIC BIAS?It is possible that public ignorance and bias is at the root of many complains. A lack of awareness may encourage low tolerance levels, particularly amongst those who are unfamiliar with modern engineering and pollution problems.NIMBY Syndrome (Not In MY Back Yard) may also contribute to peoples dissatisfaction, especially those who live downwind.ConclusionThe spreadsheet analysis of the potential wind farm indicates it would be a profitable enterprise, due to the high Net Present Value produced. This is however only deducted from a model that is only as good as the person who designed it and the assumptions it is based on. It is therefore subject to any number of unforeseen crises, and should merely be viewed as a hypothesis.The Cost-Benefit Analysis also indicates that switching to environmentally friendly sources of power would be beneficia l to both present and future generations.Discounting affects future generations as the higher the discount rate, the quicker the non-sustainable resources are likely to be exhausted. The approach may funk if the benefits are not obtainable for a prolonged period as investment will be virtually impossible to find. It is therefore hard to protect slow-replenishing resources like tropical hardwoods.Discounting can even help to devolve worse future damage-however devastating the effects-if the future damage will not be felt for several generations.There is no real alternative to CBA despite of its faults, so it should be refined rather than disregarded as a source of decision-making. Environmental decision-making is a sensitive issue. The only possible other way is to use a citizens jury. Where this has been tried however the members failed to fully understand what was expected of them , or how to place prices on abstract phenomenon. to the highest degree educated individuals recogni se the benefits to society gained from switching to green (sustainable) energy sources. The development of these sources are still in the early stages and are not going to affect the conventional production of power in the short term, it is still primary(prenominal) to develop and popularise such alternatives today. This is the only way in which they will win social and scientific approval and eventually overcome fossil fuel consuming plants as a source of power.