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Economics of Wind Power PDF Print E-mail
Compared to Germany's 1900 hours of wind power production per year, a rather conservative average production figure in the coastal Saharan region would be in the range of 3400 Full Load Hours due to the exceptional quality of the Trade Winds. Taking a price of 1000 €/kW of rated Wind Turbine capacity, 5 % real interest rate, 20 years lifetime, 2% of total investment as annual Operation & Maintenance costs, the wind power generated there costs under 3.0 €cent/kWh. From the single wind measurements available within this territory, we would actually come to better results, as at selected sites a yearly production of more than 4500 FLH can be derived.

225 kV High Voltage line 15 miles from Tarfaya
To transfer the power from the region of Tarfaya, the northern part of this area, to the center of Germany for example, the length of a HVDC line would be 3500km (incl. 28km sea cable). For this case, the total costs of wind generated electricity from the Sahara desert delivered all the way to Germany are calculated to be 4.4 €cent /kWh. Thereof 0.004 €/kWh are due to the losses of 10% if done with a HVDC line of about 5 GW capacity.

With the use of the most productive sites where wind speeds have been measured, one would expect even lower costs to be achieved.

By their large-scale application inside the EU, the specific costs of wind turbines have dropped significanty in the last 20 years. The price of the installed capacity may even be lower than 1000 €/kW that has been assumed for the aforementioned example. In the year 2000 with less than 1 GW of capacity installed, Spain managed to drop its average installed wind power costs down to 850 €/kW. During the last decade, a global frenzy in wind turbine demand fueled by a limited manufacturing supply base increased the prices of wind turbines dramatically. As the demand plummeted after the global economic crisis of 2008, so did the raw material costs required in wind turbine manufacturing. With the saturation of traditional European markets, the industrial production of wind turbines shifted to Asia and became more globalized. Today, through an elaborate supply base, the wind industry is a very competitive business. By installing close to 20 GW per year since 2010 (50% of the worlds wind turbine market), China managed to lower the prices for installed wind capacities quite significantly. In the United States, wind energy hit an all-time low in 2013, averaging 2.5$cents/kWh. Built with local components, access to cheap electricity can have a considerable impact on a country’s global industrial competitiveness.

In the Sahara desert, costly design features such as low rotational speed to reduce noise and visual nuisance may not be required alike for wind turbines installed in the more densely populated areas of Europe. On such a large scale, local manufacturing of specific wind turbine parts and components enable significant economies of scale to be achieved. Besides reducing operation and maintenance costs, these would also ensure a stable production base for wind turbines designed to match specific local wind conditions. This represents a critical parameter for the Sahara Wind Project's competitiveness and successful implementation within the region's current power supply schemes.