What size and number of wind turbine generators (WTGs) should RWE choose to produce the targeted power output from its Triton Knoll and other windfarms? Using small turbines (3.6’s) can minimize upfront per-unit costs (in significant part by leveraging economies of scale for ordering many units at once) and produce reliable and predictable operating and maintenance costs, but this choice requires more turbines to generate the same power, and at some point the units may go “out of service” or “no longer be supported” (think of your old software) by Siemens, potentially driving a need to train and develop in-house maintenance and operating staff. Using a larger turbine (RWE is apparently eyeing 8.0 MW units, which would require extensive development) would clearly reduce the number of units required, but typically dramatically increases both the per-MW purchase and the installation costs, as well as the the risk of “infant mortality,” model obsolescence (think Windows Vista), and possibly high operating and maintenance costs. Operators like RWE can borrow from the body of knowledge of capacity management (a subset of operations management), which basically offers three strategies: lead, follow, or match the anticipated demand (or in this case, the anticipated standard WTG size). Boston Strategies International has simulated “total cost” under each of the three strategies. The sum of the individual effects must be assessed over the life of the farm, taking into account the per-unit costs; per-MW costs, number of units required; installation costs; economies of scale in procurement, operation and maintenance; reliability; and risk of obsolescence; and other factors.
