Guest post by Larry F. Brown, PhD

Various commenters pointed out to me that I made an error in my calculations. 

First, the maintenance man told me the turbines were designed to produce 2.3 MW but only produce an average of 1.3 MW.  I then reduced the 1.3 by about 80% because I found that the average wind machine nationwide only produces power about 18-19% of the time.  Using the reduction from 2.3 to 1.3 and then additionally reducing that by 80+% is apparently wrong. 

Next, I have been informed that a capacity factor of 1.3/2.3 = 57% (told to me by the maintenance man) is probably way high.  Multiple comments quoted other capacity factors, all of which were lower.

Some commenters were unhappy with the units I used – i.e., MW/hr vs the MWhr .  I choose to ignore these comments because they are nit-picky. I’m wrong – my mistake – they are correct – but my meaning and intent are perfectly clear to all readers.  Let’s move on for goodness sake. 

A few commenters wondered which facility I was evaluating – it is immediately outside Monticello, UT. 

A few commenters objected to calling these things farms – mmmmm —— they are called wind farms. 

I have redone the calculations and using the following adjustments: 

· Based on the comments, and assuming the maintenance man was being overly generous in his estimate, I have reduced the capacity factor from 57% to 40%, even though most who commented on this indicated it should probably be even lower. 

· I eliminated the 80+% reduction for wind. 

· And I raised the annual maintenance costs to $1 million from $750,000.  Three-quarters of a million sounds very low.  $1 million is a little more realistic. 

Again, I pay about $.11/kWh for my electricity here in western Colorado.  So, beginning the process of calculating the profitability of these things, each tower, using a capacity factor of 40%, will produce at 920 kW which, at $.11/kW, provides an income of about $101/hr = $2,430/day = $887,000 of electricity/year.  Sounds good – so far.

The $.11/kWhr I pay includes all the distribution costs, etc. The wind farm is not paid $.11/kWhr for their electricity.  According to the ISO Wholesale Power Market Prices, this site sells electricity for about $.03/kWhr.  So instead of grossing $887,000, they might gross about $242,000 per year per turbine.

It gets lots more complicated when you consider that the wind farms are being subsidized by the government with the Production Tax Credit (PTC).  A tax credit should not be confused with a tax deduction.  A deduction reduces the amount of taxes you pay.  A credit is money back.  And the PTC is a “Refundable Tax Credit” which means the company actually gets paid by the government even if it does not owe any taxes.