Merchant Wind Power
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[edit] Merchant Wind Power
A recent development in Wind Power is the introduction of Merchant Wind Power initiatives where an owners of brown field sites, such as heavy industry, locates Wind Turbines on their land that exclusively supply them with green electricity. This has created a market where MWP companies install and operate the turbines on brown field sites, with site owners leasing land to the operator and purchasing power at reduced rates.
In most cases the development, installation and operation of the turbine site is carried out by a company specialising in Merchant Wind Power who effectively own and operate the turbines, taking all the financial risk required such as paying for procurement of turbines, installation cost etc.
In the United States, "merchant wind power" refers to plants built to serve spot electricity markets. Typically, wind plants in the U.S. are built based on long-term (10 to 20 years) contracts or "power purchase agreement" with a wholesale purchaser (such as a regulated utility or power marketing firm). Such arrangements allow for more favorable financing, as lenders and investors are more certain of future plant revenues when a credit-worthy utility agrees to purchase all or most future output at pre-defined prices (note, price may not be fixed, and can be defined either based on broad inflationary indices or linked to related commodity markets). However, in a merchant power arrangement, the wind plant is built without (or with little) prior commitment of its output to contractual off-takers. Instead, the power is sold on a spot or short-term contract basis, such as on the PJM, NYISO, or ISO-NE independent system operator power markets that have developed in the Northeastern U.S. The wind power project in Madison, NY is an example of a U.S. merchant wind power plant.[1]
- ^ [www.cleanenergystates.org/CaseStudies/Madison_Wind-final.pdf CEFN Case Study #1: Madison Windpower Project]. Clean Energy Funds Network (January 22, 2001). Retrieved on February 16, 2007.
