Determination of favorable conditions for the development of a wind power farm in Puerto Rico

Development of a wind farm in the east coast of Puerto Rico has the potential of being an attractive economic proposal. This is so because the best wind resource of Puerto Rico is located on its east shore. Reliable wind data is available for several sites on the east coast, but important information to evaluate the economic feasibility of the wind farm can only be estimated or is unavailable. For example, land values, an unclear permitting process, lack of a legal framework, and no precedent in the Island of a purchase power agreement for a wind generation project makes any economic evaluation an uncertain one.; Present Worth (PW) economic analysis is performed using estimates for unknown parameters. A sensitivity analysis is used to ascertain the variability of uncertain parameters and Monte Carlo simulation is performed to do financial risk assessment.; Our work demonstrates that a wind farm project in Puerto Rico will be a feasible project under the economic conditions we studied. A private investor could sell the electricity as low as {dollar}0.0837/kWh, or {dollar}0.0792/kWh with a tax incentive. Utilities could sell electricity as low as {dollar}.0673/kWh, or {dollar}0.0648/kWh with a tax incentive. If the utility finance with bonds the price could sell at {dollar}0.0554/kWh, and {dollar}0.0549/kWh with a tax incentive.; Sensitivity analysis showed that a wind farm project is very sensitive to energy prices, energy production and the installation costs. Monte Carlo simulation showed that an utility company has less economic risk in this type of project compared with a private investor.