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A 3 MWe wind turbine can be placed at either Site A or B, which have respective probability density functions for the wind velocity

 


A 3 MWe wind turbine can be placed at either Site A or B, which have respective probability density functions for the wind velocity at the site (assume that the power output of the turbine varies as the cube of the velocity) as shown in Fig 1. Site A Site B 20 Velocity, mis Velocity, ms The land for Site A costs $1.0 million and that at Site B costs $2.0 million. The turbine capital cost is $2 million. O&M costs for a turbine are $100,000/yr. Electricity from a wind turbine can be sold to the grid for $60/MWhre. The turbine lifetime is 20 years. The discount rate is 0.04 annually. Inflation and taxes may be ignored. Which site offers the expectation of a better investment?

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