large extent on wind resources, in
particular, mean wind speed at hub height, the cost of turbines and related equipment, the
proximity to a sufficiently strong transmission grid (i.e. the cost of grid extension and grid
reinforcement), and the accessibility of the site. Other factors such as the existing generating
mix, system load profiles, connections to grids in other countries/regions, electricity markets,
system operating procedures, and land costs also have a significant impact on the costs of
wind power generation. A large number of studies compare the costs of wind power with
those of other electricity generation technologies (e.g., NEA/IEA, 2005; Kammen and Pacca,
2004; Lazard, 2008; CPUC, 2008; EIA, 2008; ESMAP/WB, 2008). Since electricity
generation technologies vary significantly in terms of their investment requirements and
operational characteristics, costs are converted to a level or base for comparison purposes,
known as the levelized (or bus bar) cost of electricity generation. The levelized cost includes
mainly investment or capital costs, operation and maintenance (O&M) costs, and fuel costs.
While capital and fixed O&M costs are proportional to installed capacity, variable O&M and
fuel costs are functions of electricity output.