SITE ASSESSMENT: 3TIER'S R-CUBED™ ANALYSIS

The goal of a detailed site assessment is to identify the least risky, most cost efficient renewable energy site, from exploratory analysis to due diligence. This requirement means that project selection and sitting has to be much more than “it’s windy/sunny/rainy here.”
Typical concepts and their applications to project siting are:

• Availability: The ability of the project to produce power when it is most needed.
• Variability: How volatile is the resource and how this will effect the project’s integration with the power system.
• Reliability: What is the long-term average production expected from the project.

Risks Associated with Weather and Climate

The risks associated with weather and climate affect all aspects of the renewable energy project as detailed below:

3TIER’s Resource-Related Risk (R-cubed™) approach

One of the key determinants for the financial performance of a renewable energy project is the accurate estimation of the project’s capacity factor at the daily, seasonal and yearly timeframe. A several percentage-points error in the estimation of the yearly capacity factor of a wind project may translate into millions of dollars of lost profits over the lifetime of the project. Estimating the capacity factor of a project from observations covering only a couple of years is a highly risky approach. For instance, two years worth of observations may yield a 15% error in the estimate of the capacity factor.
3TIER’s R-Cubed approach for estimating the project’s capacity factor over an extended period of time (20 to 30 years) reduces dramatically the uncertainty in the estimation. This approach includes economic and financial sensitivity analysis and the development of ‘back-cast’ energy production record from the numerical weather and climate models to accurately estimate the renewable resource at the site. This approach is equivalent to knowing what the project might have produced as energy production if it had been in operation for the past 40 years.