L. Miller, R. Carriveau, S. Harper, S. Singh, Evaluating the link between LCOE and PPA elements and structure for wind energy, Energy Strategy Reviews, 16, 33-42, 2017

Source: Energy Strategy Reviews

Abstract

Variability exists amongst reported levelized costs of energy (LCOEs) for wind. Wind is unique from traditional energy sources in that the fuel is free, with the majority of costs determined by capital expenses. Power purchase agreements (PPAs) are critical to the success of a project, offering a guarantee of long-term revenue. Integral to negotiating a PPA is having an accurate estimate of the LCOE for the project. This research will evaluate LCOEs for wind to uncover reasons for substantial differences. PPA ownership structures and elements will also be evaluated with consideration of how objectives, resources, and farm management will impact decisions. The importance of understanding LCOE components as they relate to PPA negotiations will be highlighted with a focus on emerging markets and case analyses using NREL’s System Advisor Model (SAM).

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