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