Wind farms can be self-​​sustaining, con­cluded two North­eastern finance pro­fes­sors in a recent journal article. A few mea­sures to increase pro­duc­tivity and decrease equip­ment costs could reduce the cur­rent depen­dence on gov­ern­ment sub­si­dies and incen­tives designed to make wind farms viable.

The North­eastern researchers con­tend that wind farms could be self-​​sustaining oper­a­tions even if the cur­rent gov­ern­mental pro­duc­tion tax credit, which pays 1.9 cents per kilowatt-​​hour, were elim­i­nated. Their work appeared in the May 2009 issue of Renew­able and Sus­tain­able Energy Reviews.

Anand Venkateswaran, assis­tant pro­fessor of finance and insur­ance, and Jonathan Welch, a member of the busi­ness fac­ulty from 1977 until his death in 2009, col­lected and ana­lyzed 15 years ofdatafrom approx­i­mately sixty 100-​​turbine wind farms. Noting that a pro­duc­tive wind farm gen­er­ates elec­tricity 40 per­cent of the time, or 12 days a month, Venkateswaran sug­gested that increasing pro­duc­tivity to 53 per­cent, or 16 days a month, would elim­i­nate the need for sub­si­dies typ­i­cally needed to keep such oper­a­tions afloat.

There are a couple of ways that pro­duc­tion could be increased,” he added. “Lighter blades on the tur­bines would be one way to improve effi­ciency; siting farms in windier spots would be another.” And the prof­itability of wind farms could also be improved if the cost of tur­bines, which aver­ages approx­i­mately $3.2 mil­lion per unit, were reduced, he said.

While the researchers noted that key ques­tions remain about whether wind energy is finan­cially sus­tain­able without “exten­sive” gov­ern­mental sup­port to create and nur­ture the overall growth of the industry, they con­cluded: “Wind energy can pro­vide the best of both worlds. It is sus­tain­able from an envi­ron­mental per­spec­tive and it is becoming sus­tain­able financially.”