¶ … wind power an effective form of renewable energy generation? Wind, which is defined as moving air, can produce power because of the kinetic energy inherent in its high speeds. High winds are caused by solar heat. The heating of large swathes of land produces pressure imbalance between the heated lands and the lands that have not received as much heat, resulting in the movement of air. Wind, courtesy of its high speeds, has also been harnessed to generate power, or electricity, to be specific. The use of wind for the production of energy is increasingly becoming more popular because harnessing the kinetic energy inherent in wind does not harm the environment, unlike the extraction of oil or the production of nuclear power. Windmills are used to generate power; the circling motion of the shaft rotates a turbine within the mill, enabling the conversion of kinetic energy into electricity. To produce electricity on an enormous scale, there is a need for a large number of windmills to be set up over an area with high wind speeds (a minimum of 15-kilometer per hour). A place whereby windmills have been set up to harness wind energy is referred to as a wind energy farm (Provey, 2009).

Cost

The costs of setting up wind farms and operating them are pretty much straightforward. The cost of power generated using wind energy is significantly lower, compared to other energy production forms, since it does not entail high maintenance costs. Once the energy farm has...

However, needless to say, other wind turbines might require more money to maintain than others. But, still generation of electricity using wind power is still one of the cheapest-priced forms of renewable energy today, and often costs between 4 to 6 cents per KWh (Kilowatt-hour), based on the initial investment and the location of the wind farm (Doherty, Outhred & O'Malley, 2005).
However, it is also important to note that "equity" and "debt" associated with initial project financing are often quite high. A normal wind farm project capital financing structure will involve a combination of equity (by the project owners) and debt (often provided by different creditors). Equity investors are, in other words, the shareholders of the business, and they will share in the profits generated. In an ordinary wind farm project, the creditors' debt is utilized to finance between 70 and 80% of the total project cost. Such debts are usually paid with interests. Additionally, some experts have shown doubts about the cost-competitiveness of wind energy (U.S. Department of Energy, n.d.; Bergmann, Hanley & Wright, 2006). Both small and large wind farms depend on huge initial investments; this is often to set up as many windmills so as to compete favorably against more established energy sources, such as hydrocarbons and nuclear power. Nonetheless, wind power should still score highly in terms of cost basis, if it is to be used as a substitute of…