Sensitivity and Uncertainty Analysis of Economic Feasibility of Establishing Wind Power Plant in Kerman, Iran

The wind energy is considered as a precious replacement for fossil fuels in electricity generation. in this regard, many governments like the one in iran tend to support the development of this type of renewable energy source. however, fluctuations in iran’s economic conditions and uncertainty in the available wind power have increased the risk of investment. in this work, a methodology is used to address the uncertainty in wind conditions using the probability of occurrence of the minimum wind speed. in addition, a feasibility study is considered for the economic assessment of establishing a wind turbine power plant in the kerman province (iran). a sensitivity analysis is developed to analyze the effect of changes in inflation and currency rates on the project economic viability. the results obtained show that the proposed site enjoys an excellent wind power potential with respect to a wind power density of 971.4 w/m² at a height of 100 m. the economic analysis results indicate that the project is viable when its budget is supplied through the governmental resources (providing us dollar at the governmental rate). however, the sensitivity analysis results reveal that the project is no longer viable when its budget is supplied through a foreign exchange market (providing us dollar at the market currency rate). therefore, this paper suggests that if the government tends to support the development of wind energy in iran, it is necessary to either provide the project budget by governmental resources (4200 t/$) or to buy electricity higher than 1391.6 t/kwh (845.6 t/kwh more than the current feed-in-tariff). furthermore, the non-linear relationship between the net present value and the inflation shows that a reduction in the inflation rate can significantly improve the investment pay-off.