Financial Valuation of roof-top wind turbines' performances

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1. Background

In the most industrialized countries, the last decade has been characterized by the enactment of legislative acts aimed at supporting the issue of sustainable energy as the main catalyst for public and private investments. In terms of energy efficiency, the European focus has been shown in European Directives concerning the increase of the energy performance of buildings (2002/91/EC), the rate of building renovation (2012/27/UE) and the promotion of renewable energy sources (2009/28/EC). Diffusion of renewable energy sources (RES-E) in the electricity sector could provide the basis for achieving the reduction of CO2 emissions in the long-term, for which the European Directive 2009/28/EC sets a minimum threshold of RES equal to 20% of the final energy consumption.

The latest frontier of the small wind power market is the generation of electricity in the urban environment. Small wind turbines installed on the flat roofs of existing buildings for a period coinciding with the life of the plant constitute a type of“urban” RES-E. Compared to the classical wind systems, represented by plants which extend over large areas excluded from the original agricultural vocation, the roof-top wind turbines provide the best compromise between the need to produce an annual energy production (AEP) that justifies the investment in financial terms, and the landscape and environmental instances concerning the respect of the urban skyline and the soil sealing.

The installation of roof-top wind turbines is particularly suited to those areas characterized not only by a good wind speed distribution, but also by climatic conditions that favour the realization of flat roofs on the buildings, thus representing a good support base for the structures of the micro-turbines.

2. Methods

This research concerns three issues, that are necessary for the definition of the convenience in the installation of roof-top wind turbines.

The first issue relates to the assessment of the threshold of financial feasibility (profit) for an investor in the installation of a wind energy plant, i.e. the identification of the most productive urban areas for the location of the roof-top wind turbines.

The second issue is the appraisal of the land lease value of the area (flat roof) upon which the wind energy plant rests for a limited period of time (concession period). In ordinary terms, it is plausible to consider the split between the private/public entrepreneur that realizes the investment in small-scale turbines and the owner - usually a condominium - of the area that hosts the wind energy plant. Therefore, there is a need to develop an economic relationship between the owner (lessor) and the investor (tenant), relating to the land lease for a limited period of time.

The third issue concerns the identification of the aerodynamic parameters that mostly influence the financial feasibility of an investment in roof-top wind turbines. For this reason, the functional relationships between the economic variables total profit and land lease value and the aerodynamic parameters involved in the definition of an urban wind model have been analyzed. This aim is pursued through a qualitative analysis, which leads to the division of the territory investigated in homogeneous areas in terms of the financial feasibility of the investment, assessed through the elaboration of correlation histograms between the economic variables total profit and land lease value and the aerodynamic parameters; subsequently, an econometric analysis was developed, in order to interpret the functional relationships between the economic variables and the explanatory parameters considered.

3. Results

The results obtained constitute a reference for the various - public and private - actors operating in the territory: firstly, for those that are engaged in the research of innovative and economically self-sustainable projects, able to meet the rewarding requirements provided by the European Commission in the allocation of Community funds; secondly, for the entrepreneurs interested in exploiting the incentives provided by the energy sector legislation for RES-E investments; thirdly, for the owners of the flat roofs, that require land lease values motivated, as support for the definition of the land lease price in the phase of negotiation with the investors. In particular, several authors have highlighted the opportunity for policy makers to provide public direct investments in complementary assets such as RES infrastructures (Henriot, 2013; Steinbach, 2013); fourthly, in line with the objectives of the “Smart Cities”, for urban planners of the Public Administrations, in order to sensitize them about the urban parameters to be defined (height of the buildings, distance between buildings, etc.) and therefore to generate a urban morphology that does not generate reductions in wind speed.

4. Conclusions

The results of the research constitute an essential evaluative support, first of all, for the (public and/or private) operators, interested in taking advantage of European resources and/or the incentives offered by energy regulations for the installation of micro-turbines in a windy territory and identifying the areas characterized by higher yields; secondly, for the tenants (investors) and the lessors (condominiums), as a source of motivated and contextualized economic values, compared to the current estimation, that is, in practice, exclusively entrusted to the contractual capacities of the parties or to prices available from the web and referred to the entire national territory; finally, the econometric models obtained and the evaluative maps described represent an effective tool for defining a system of cadastral incomes equalized to the wind productivity of the areas (“wind” incomes).

5. Future ideas/collaborators needed to further research?

The methodology implemented, borrowing with a complementary approach GIS tools and econometric algorithms, represents an essential basis for the formation of uniform territorial areas in terms of wind power capacity, and, consequently, of "wind" taxable incomes. In this sense, it constitutes an easily repeatable operative and logical path, that can be adopted in other territorial contexts.

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Round: Open Peer Vote
Category: Climate Impact Prize

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