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Wind Capacity Tiers PSB Cost Analysis Subgroup

This analysis, conducted by William Basa and Ben Beinecke in July 2009, explores the implementation of wind capacity tiers for Vermont's Feed-in Tariff (FIT). It highlights how economies of scale in wind turbines lead to a decrease in cost per kilowatt as capacity increases. The proposed tier structure categorizes wind capacities into small (16-100 kW), mid-size (101-500 kW), and utility-scale (501-2200 kW), aligning with existing definitions from the AWEA and NREL. The methodology involves developing a cost curve based on publicly available data to analyze cost variance across different capacities.

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Wind Capacity Tiers PSB Cost Analysis Subgroup

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  1. Wind Capacity Tiers PSB Cost Analysis Subgroup William Basa Ben Beinecke JULY 2009

  2. Wind Capacity Tiers Make Sense for VT FIT • Wind Capacity Tiers make sense because wind turbines have economies of scale • Cost per kilowatt decreases as capacity increases (negative slope) • Cost per kilowatt decreases with a non-linear relationship to capacity (logarithmic shape to curve) • Dividing capacity into tiers helps minimize variation in cost • Capacity Tiers should be small at low capacities and large at high capacities • NPS has proposed 3 Tiers above the 15 kW designation: • Small Wind: 16 to 100 kW • Mid-Size Wind: 101-500 kW • Utility Scale: 501-2200 kW • These recommendations largely agree with REV’s proposed tiers • <15kW, 15-150kW, 151-500kW, >501kW

  3. “Small Wind” Tier Based on Existing Definitions American Wind Energy Association (AWEA) Small Wind “defined as having rated capacities 100 kilowatts or less” US Federal Government for Investment Tax Credit/ARRA Eligible small wind property includes wind turbines 100 kW or less in capacity. National Renewable Energy Laboratory (NREL)/Department of Energy “Small wind turbine” refers to a turbine less than or equal to 100 kW.”

  4. Methodology • Develop a cost curve based on publicly available information on installed costs of commissioned wind energy projects • Not a perfect approximation of cost at any capacity (not meant to be), but accurate enough to show trend in data (ie economies of scale, decreasing costs) • Test existing tiers (less than or equal to 15 kW; >15 kW) for cost variance • Divide cost curve into tiers based on existing definitions of wind projects and cost variance • Test tiers for cost variance

  5. Published Installed Costs as Chart Data

  6. Logarithmic Trendline Existing Proposal for Single Tier above 15kw

  7. Existing Single Tier Proposal: 16-2200kW Cost Variation ~$4200

  8. NPS Proposed Tier 2: 16-100 kW Cost Variation ~$1400

  9. NPS Proposed Tier 3: 101-500 kW Cost Variation ~$1350

  10. NPS Proposed Tier 4: >501 kW Cost Variation ~$1300

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