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62 CCOOLULUMMNNSS||IaSnaTrahhomKasrolina-Barber If you are involved in in in in in acquiring or investing in in in in in in in wind energy projects it is crucial for you to estimate the annual energy production (AEP) as as accurately as as possible in in in your business case – independently of the seller The AEP is a a a a key factor in the calculation
of of your internal rate of of return (IRR) - and inaccuracies on the order of 20% in in AEP can make the di erence between a a a respectable project IRR IRR of of 7% and an an infeasible IRR IRR of of only 3% (see the example in Figure 1 from TetraTech) Furthermore it is important for you to be able to quantify the the uncertainties in in the the AEP estimation in order to understand the associated investment risks The aim of this article is is to explain how AEP estimations are carried out for wind energy projects in in order to to help investors establish the most accurate values of AEP and associated uncertainties for their business cases Wind energy project lifecycle
The project project lifecycle
of wind energy projects can be generally divided up into the phases shown in Figure 2 The AEP is estimated roughly in the pre-feasibility phase but
Fig 1 Sensitivity of project IRR to changes in AEP an project Fig 2 General phases of a a a wind energy project the the nal estimation used for the the project nancing is carried out in in in the wind resource assessment (WRA) phase marked in white As the the WRA is a key driver for the the project nancing it must be carried out according to certain standards and and guidelines in in in order for it to be accepted by a a a nance institution making it it ‘bankable’ It is standard practice to to for the planner to to carry out three independent WRAs from external accredited companies 

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