Financing Aspects - Wind Energy

A financial analysis is intended to clarify whether or not the wind farm project is financially feasible for the chosen site and types of wind turbines and several other parameters. A financial efficiency threshold is often set by the project developers. The financial analysis can reaveal, which technical or non-technical modifications can be conducted to reach and surpass the set efficiency threshold. For this purpose a complete cost-benefit analysis under consideration of all relevant project parameters (according to site conditions, choice of technology and financing conditions) must be conducted.

Costs

The analysis of costs include:

• Investment Costs
• Operation and Maintenance Costs
• Land Lease Costs
• Costs for Mitigation Measures
• Project Financing Structure
• Equity Finance
• Debt Finance
• CDM Up-Front & Administrative Costs
  

Benefits
Financial Benefits
Electricity Sales
CDM Revenues

Additional Information needed
Inflation Rate
Rate of Exchange
Depreciation Rates
Dividend Distribution
Applicable Taxes
Discount Rate (WACC)
Project s Milestones
Major Financial Indicators
Net Present Value
Financial IRR (FIRR) and Return on Equity (ROE)
Return on Equity (ROE)
Debt Service Coverage Ratio (DSCR)
Levelized Costs

see: GTZ 2009: Development of Implementation Strategies for a Regional Regulatory Action Plan (RRAP) for the Western Cape. http://www.gtz.de/de/dokumente/gtz2009-en-regional-regulatory-action-plan-western-cape.pdf

Financial Incentives and Programme Funding pp. 78

There are different types of instruments available to support renewable(wind) energy projects which range from direct to indirect policy instruments. Direct policy measures, such as (encouraging) Feed-in-Tariffs, aim to stimulate the installation of renewable technologies, whereas indirect instruments focus on improving long-term framework conditions. In addition to regulatory instruments, other approaches are aimed at removing barriers which limit investments, such as lack of information, lack of skills, limited research and development, inadequate regulatory structures, and limited incentive programmes.(...) Renewable energy incentive programmes can assist in establishing a competitive selfsustaining renewable energy supply while increasing the quantity of renewable energy
generated country-wide. There are a range of incentives that can be used including:

• direct subsidies from government in the form of feed-in tariffs and capital grants;
• fiscal incentives such as tax rebates or exemptions;
• investment incentives which encourage the participation of national and international financiers; and incentives that promote public-private partnerships to increase the use of renewable energy technologies.
  

Portal:Wind