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Economic Aspects of Wind Power Generation in Developing Countries

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  • van Kooten, G. Cornelis
  • Wong, Linda

Abstract

Power interruptions are a typical characteristic of national grids in developing countries. Manufacturing, processing, refrigeration and other facilities that require a dependable supply of power, and might be considered a small grid within the larger national grid, employ diesel generators for backup. In this study, we develop a stochastic simulation model of a very small grid connected to an unreliable national grid to show that the introduction of wind generated power can, despite its intermittency, reduce costs significantly. For a small grid with a peak load of 2.85 MW and diesel generating capacity of 3.75 MW provided by two diesel generators, the savings from using wind energy (based on wind data for Mekelle, Ethiopia) can amount to over a million dollars per month. While the savings from deployment of wind turbines are enormous, the variability of wind prevents elimination of the smaller diesel unit, although this unit operates less frequently than in the absence of wind power.

Suggested Citation

  • van Kooten, G. Cornelis & Wong, Linda, 2009. "Economic Aspects of Wind Power Generation in Developing Countries," Working Papers 54706, University of Victoria, Resource Economics and Policy.
  • Handle: RePEc:ags:uvicwp:54706
    DOI: 10.22004/ag.econ.54706
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    File URL: https://ageconsearch.umn.edu/record/54706/files/WorkingPaper2009-05.pdf
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    as
    1. van Kooten, G. Cornelis & Timilsina, Govinda R., 2009. "Wind power development : economics and policies," Policy Research Working Paper Series 4868, The World Bank.
    2. Lawrence Pitt & G. Cornelis van Kooten & Murray Love & Ned Djilali, 2005. "Utility-scale Wind Power: Impacts of Increased Penetration," Working Papers 2005-01, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
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    More about this item

    Keywords

    Environmental Economics and Policy; International Development; Resource /Energy Economics and Policy;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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