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# DEWI Magazin Nr.

## H. Klug, DEWI Wilhelmshaven

In the planning and financing stage of a wind farm project a risk assessment is required quantifying all risks
related to the wind farm financing (technical due diligence). Financial Modelling needs a comprehensive
understanding of the project assumptions in combination with the performance of a sensitivity analysis in
order to define an agreed base case. The result of an energy yield prediction in terms of an AEP (annual
energy production) is called the P50. The probability of reaching a higher or lower annual energy produc-
tion is 50:50. A risk assessment includes the quantification of the project specific uncertainties (see Fig. 1)
and the whole range of exceedance probabilities (Pxx) of the wind farm’s annual energy production. P75
is the annual energy production which is reached with a probability of 75%. The risk that an annual ener-
gy production of P90 is not reached is 10% (see Fig.2). Both values are widely used by banks and investors
as base in their financing decisions.
In order to reduce the financial risk of a wind farm special attention should be given to the operation and
maintenance contract (long term warranties including availability warranties in terms of losses in the ener-
gy production) and the performance warranties (wind farm performance in relation to a reference mast).
Enhanced flow models should be used for the energy yield prediction and the calculation of the wind farm
power curve which are validated for the type of terrain.

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DEWI Magazin Nr. 28, Februar 2006

Fig. 1: Schema of a typical energy yield assessment process and its uncertainties. All steps and input data are connected to
specific uncertainties, which are summarised to a typical overall uncertainty.

Exceedance Probabilities, Uncertainty 9% Wind Farm per WT Exceedance Probabilities, Uncertainty 13% Wind Farm per WT
Long-term AEP 205.2 3.87 Long-term AEP 205.2 3.87
AEP exceeded with a probability of 50% 205.2 3.87 AEP exceeded with a probability of 50% 205.2 3.87
AEP exceeded with a probability of 75% 192.8 3.64 AEP exceeded with a probability of 75% 187.2 3.53

## Exceedance Probability of AEP Exceedance Probability of AEP

(Long-Term) AEP Exceedance (Long-Term) AEP Exceedance
Wind Farm Probability Wind Farm Probability
[GWh/a] P [GWh/a] P
100% 100%
235.6 5% 249.1 5%
90% 228.9 10% 90% 239.4 10%
224.3 15% 232.9 15%
80% 220.8 20% 80% 227.7 20%
217.7 25% 223.2 25%
Exeedance Probability

Exeedance Probability

70% 70%
214.9 30% 219.2 30%
60% 212.3 35% 60% 215.5 35%
209.9 40% 212.0 40%
50% 50%
207.5 45% 208.6 45%
40% 205.2 50% 40% 205.2 50%
202.9 55% 201.9 55%
30% 30%
200.5 60% 198.4 60%
20% 198.1 65% 20% 194.9 65%
195.5 70% 191.2 70%
10% 192.8 75% 10% 187.2 75%
0% 189.7 80% 0% 182.8 80%
160 180 200 220 240 260 186.1 85% 160 180 200 220 240 260 177.6 85%
181.5 90% 171.0 90%
AEP [GWh/a] AEP [GWh/a]
174.8 95% 161.3 95%

Fig. 2: Presentation of an exemplary result for the Pxx-values. The calculated result (P50) is the same in both cases, the
uncertainty however is different, and hence the P90 values.

For several wind farm projects in a portfolio of an investor the risk can be mitigated by including wind farms
in different wind regimes and by using different turbine techniques or turbines with reduced performance
uncertainties. If the power curve of a specific type of turbines is verified 4 times (some types are measured
more than 20 times) the uncertainty of the power curve can be reduced by a factor of 2. From a financiers
point of view it is preferable when the P90 or P75 due to the lower risks goes up even if the P50 slightly
goes down by the applied measures.
[1] Klug, Strack : Technical Risks related to Wind Farm Financing; Proceedings of the AWEA, Washington,
2002
[2] Klug: Wind Farm Financing: Lessons learned from Contractual Issues dealing with Energy Production
Warranties, Proceedings of the Global Wind Power Conference, Paris, 2001
[3] Albers, Klug, Westermann: Power Performance Verification, Proceedings of EWEC 99, Nice, 657-660.
[4] Klug, Strack : P50-P75-P90 How to reduce the risk of a wind farm project; Proceedings of the EWEC,
London, 2004
[5] Dutilleux, Klug, Strack : Financial Risk management in wind energy projects; Proceedings of the CAN-
WEA, Toronto, 2005
[6] M. Strack, W. Winkler: Analysis of Uncertainties in Energy Yield Calculation of Wind Farm Projects,
Dewi Magazin No. 22, Wilhelmshaven, February 2003.

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