Estimating CO2 Offsets For Investment

To calculate how much carbon dioxide (CO2) each £ of investment will offset in a renewable energy project, we need to estimate two things:

• Total cost of the project (capital and operational)
• Total CO2 offset of the project

For our North Walsham project, we shall assume a 4.0MW installation of two Enercon E-82 turbines. Our estimated costs are:

• £6.9M capital cost (hardware and installation)
• £170K per year operational cost (including decommissioning fund)

Given the expected 25-year lifespan of the turbines, the total cost is:

6,900,000 + 170,000 * 25 = £11,160,000 lifetime cost over 25 years

Now, to estimate the carbon offsetting we use the formula (slightly modified) from the BWEA website [1]:

CO2 (in tonnes)= (A x 0.3 x 8760 x 430)/1000

• where A = the rated capacity of the wind energy development in MW
• 0.3 is a constant, the capacity factor, which takes into account the intermittent nature of the wind, the availability of the wind turbines and array losses
• 8760 is the number of hours in a year
• 430g CO2/kWh is the current carbon emission figure from conventional sources

We will use a constant of 0.27 instead of 0.3. This means that over a year, our 4.6MW installation will offset:

(4.0 * 0.27 * 8760 * 430)/1000 = 4068 tonnes CO2/year

Over 25 years, this adds up to 101704 tonnes CO2 total offset

Now we can combine our total costs and total offsets to produce two numbers:

• Cost per kg of CO2 offset = £0.11/kg
• Amount of CO2 offset per £ invested = 9.11 kg/£

If you want to offset a certain amount of CO2 which you knowingly produce each year, use the first figure to work out how much you should invest. For example, if your household has a carbon footprint of 2 tonnes CO2 per year, that's (0.11 * 2000) = £219 per year to cover your carbon emissions.

Assumptions

We have made no allowance for CO2 emissions during wind farm construction.

We assume that the wind farm has achieved planning consent; early stage investors run the risk of this not happening.

References

[1] British Wind Energy Association: Calculations for wind energy statistics