Question: A proposed wind farm installation is based on the use of fourteen 2.5 MW wind turbines. The installed capital cost is estimated at $1100/kW

A proposed wind farm installation is based on the use of fourteen

A proposed wind farm installation is based on the use of fourteen 2.5 MW wind turbines. The installed capital cost is estimated at $1100/kW & the annual operation & maintenance costs are estimated to be 3% of the original capital cost. Financing for the project is to come from two sources: 1) A 12 year loan at 4% (60%), and 2) an equity investment that has a return of 18% (40%). The average capacity factor of the wind farm is estimated to be 0.32. a) Determine the estimated cost of energy (S/kWh) from this proposed wind farm. b) What should be the minimum price of electricity so that this wind farm would be profitable?

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