The costs of project life mainly consist of the initial investment
cost and operation and maintenance cost, through the whole project.
The initial investment cost includes turbine cost and construction
costs such as civil work cost, grid connection cost, and
construction management cost. The benefits of the project life consist
of four main parts, which are sale of electricity, subsidy supported
financially from the government, carbon credit sale, and
reduction of imported crude oil. The calculations of costs and benefits
are described in detail in the Appendix.
In project development of electrical energy production from
wind energy, economic analysis is necessarily proposed to determine
financial indices for decision making of investment. Those
indices in common use are: net present value, internal rate of
return, benefit cost ratio, and payback period. The net present
value is an economic indicator to analyze the profitability of a project
or an investment in capital budgeting. The internal rate of
return is used to determine the expected rate of growth of a project
or an investment. The benefit cost ratio is another indicator about
profitability that a project or an investment can earn with respect
to the corresponding investing costs. The payback period indicates
the number of years when the return of cash reaches investment
cost. However, those financial indices may require decision making