Outrun Change

We need to learn quickly to keep up with the massive change around us so we don't get run over. We need to outrun change.

Resale price of a wind farm, almost new, barely any miles, just off the dealer’s lot

Per megawatt:

  • $2.5M – construction cost
  • $0.5M – resale price

As I notice articles describing the construction cost to build wind and solar facilities, I’m accumulating the information. A while back there was a discussion on the resale price. Compared to slice-and-dicers, a brand new car holds its value incredibly well.

Depreciation from driving a car off the dealer’s lot is nothin’ compared to a wind turbine.

4/17 – Million Dollar Way- Let’s Do The Math — April 17, 2015; Original Price: $2.6 Million / MW — Sold For $500K / MW

Mr. Oksol gathers information on the sale of two wind farms, Chanarambie and Viking, from EDF Renewable Energy to ALLETE Clean Energy.

The two facilities have combined 65 slice-and-dicer towers with theoretical capacity of 97.5 MW. That is 1.5 MW per turbine.

The sale has price tag of $47.5M.

He was able to find some info on the construction. Reports indicate the cost for this and several other facilities was approximately $900M for 351 MW of theoretical capacity.

This project started back in 2011, was commissioned in 2013, and sold in 2014.

Let’s look at those costs per MW:

  • $2.56M / MW = $900M / 351 MW = construction costs in 2011 through 2013
  • $0.49M / MW = $47.5M / 97.5 MW = sale price in 2014

For a $1.5 MW turbine that is a construction cost of$3.8M, sales price of $0.7M, and write-off  of about $3.1M (exclusive of humongous tax subsidies at the front end and humongous tax write-off at the back-end).

Even allowing for some average cost versus specific project variation, that’s a pretty serious write off. Around $2M a megawatt.

MDW article repeats calculations from his calculations on 8/25/14 for reference points on construction costs:

  • Solar: $3 million / MW
  • Wind: $2.5 million / MW
  • Natural gas: $865,000 / MW

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