Update - China: New $659 million wind farm will pay for itself in 2 years

Posted by Rick C. Hodgin

Jilin (China) - The National Energy Administration has approved a plan allowing China Datang Corp, the nation's second biggest power producer, to construct a $659 million wind farm facility that will generate 400 megawatts. At $0.10/kWh, it will pay for itself in about two years.





The math on this is why you're seeing it at TG Daily. The concept of spending $659 million to build a wind farm might seem outrageous, but then when we did the math and were floored.



$659,000,000 to generate 400,000,000 watts of power, or 400,000 kW. That's a constant income of $40,000 at $0.10 per kWh. Divide $659 million by $40K and it's 16,475 hours. Divide that by 24 and it's 686 days. Divide that by 365.25 and it's 1.9 years.



Provided the wind source remains at the 400 Megawatt level, within two years the China Datang Corp's wind farm will have paid for itself. Even if it's only at 2/3rds, it will only take three years. And even if it took five years, after that it will turn into a profit machine (or a way to generate power for far less money depending on which way it goes).


Read the story at Bloomberg.



Opinion

Such a facility would generate $350 million per year in revenue (less maintenance and operational expenses) at $0.10/kWh.



$659 million in up-front costs to have virtually free power in two years ... Why the U.S. isn't wholly embracing this idea is beyond me. We have several plain states that could harness vast quantities of wind power.

And solar power on the western states that are mostly desert. Huge, 10,000+ acre solar farms could be created where there is otherwise useless land. Plus, in those desert regions the sunlight shines hot and long 365 days a year with rarely a cloud in the sky.



And recently a fairly large underwater turbine was installed in the Mississippi. It is expected to generate 35 kilowatts of power continuously, enough to power 5-7 homes. If you consider that such a device could exist in the river, powering the homes along the short on both sides, then imagine several such devices deposited every 50 feet or so along the 1,000+ mile Mississippi. It would ultimately be able to power millions of homes continuously, 24/7 because the water never stops, with only the cost of maintenance required to go in every so often and replace or repair damaged units.

I really feel the United States is not doing all it could to provide us with cleaner power. And all the while, we are being charged carbon taxes and forced to pay for ethanol at almost every gas station (they have signs up that says "May include up to 10% ethanol" even for normal gasoline), an industry which is now facing bailout plans as well.


UPDATED:  January 1, 2009 - 7:13pm CST
I would like to suggest a thought or two to everyone regarding the 400 megawatt facility:

Wind farm research is now several years in with many nearly 150K large-scale wind mills installed world-wide, according to the world's largest manufacturer of wind mills (Vestas).  If history has shown the industry that a typical return on wind farm power is between 25% and 40%, then why does everyone assume this facility is rating its theoretical maximum?  Wouldn't that be like shooting yourself in the foot?  Or setting yourself up for failure in light of investors?

Wouldn't it be far more likely that wind power companies today rate their "400 megawatt" facility as being the actual amount of power they expect to get out of it after factoring in all of the variables?  Wouldn't it make more sense that such a construction would really be a 1 gigawatt facility when operating at 100% capacity, and then something around a 400 megawatt facility when operating at the projected 40% capacity?

Also, to everyone who is suggesting that wind power is not a viable alternative ... are you kidding?  The wind continues to blow even if not steadily and all of the time.  Once the facilities are built, the energy is essentially free.  The only expenses would be ongoing maintenance required to repair the mills.  And in truth, any wind mill company today not creating mills that are easy to climb into and repair is simply not doing what they should be - and it is my belief the market will sort out their bad business practices in very short order.

Solar facilities, wind facilities, modern-day non-damming hydro-electric facilities, these all need easy, inexpensive maintenance abilities to be viable.  And with wind energy, I see that as being extremely possible.  There are only a few moving parts inside a windmill, and bearing technology was perfected decades ago.  This isn't rocket science, but it is economics.  The designers need only spend a lot of time building one good design that can be replicated 10s of thousands of times to do it right.  It doesn't need to be like car alternators where every year, make and model has a different one.  Easy, correct and rapidly producible interchangeable parts built this nation (the United States), and that's what's required here.

The first company that can produce an inexpensive, component-based,
easily maintainable wind mill setup will win.  They'll provide to mankind a true, viable way of generating clean, renewable, essentially free power.  And, it will be cost effective and profit generating over a very short period of time (a few years).  Just watch and see what engineering can do.