Abstract—It is crucial to analyze the wind distribution throughout the year and the expected annual power generation (Mwh) to evaluate a wind power investment. The cut-in and cut-out wind speeds along with the size of the wind turbine should carefully be included to the analysis as they will affect the amount of power generation. On the other hand, the capital cost and cost of power generation each year should be allocated to the economic life of the project using an appropriated discount rate. In this paper, an economic analysis method and a wind simulation approach is developed to evaluate the expected annual power generation of a wind project. The revenue is calculated using expected power amount and the power price ($/Mwh) and the net return is found by subtracting the cost. The necessary economic analysis is then performed using net present value and payback method. The weibull distribution is assumed for the wind and operational characteristics of the turbine are included. Index Terms—Wind power, economic analysis, wind simulation, turbine operational constraints. I. INTRODUCTION After the 90’s the importance of wind power has grown tremendously as the demand for energy and the cost of fossil fuels increased. Especially after the price fluctuiations in coal and natural gas in recent years has led the wind power investments more attractive and economic. The cost distributions in fossil fuel based power plants and wind power are different, the wind power investmens require a huge initial capital cost and there is no fuel cost. On the other hand, 55% of total cost in fossil based plants is accepted as the fuel cost [1]. This difference should be carefully considered and the analysis should be performed before the actual investment is made. The wind distribution of a particular site, the characteristics of the wind over the years ahead would certainly affect the amount of power produced. However, not many analysis are available to help energy companies when they analyze the long term behaviour of the wind turbine and its economic analysis. The main objective of such studies is to decrease the uncertainity and prevent the huge losses if the investment is already made and not much revenue is gained to cover the expenses in the future. All wind turbines installed globally by the end of the year 2009 provides 2 % of the global electricity demand and this is growing with an average of 25% annuam [2]. The growth rate especially for developed countries is double digit and it is expected that renewable resources would provide 20% of Manuscript received July 5, 2014; revised August 29, 2014. Ahmet Yucekaya is with the Kadir Has University, Fatih, İstanbul, Turkey (e-mail: ahmety@khas.edu.tr). total energy demand in the near future. There are also incentives from the goverments to led wind farms grow. Such concerns also trigger the investments for wind farms. However the economic analysis especially in the energy industry is vital as competition is fierce and there is little chance that an uneconomic project will survive. Wind turbines come in different sizes and configurations and are built from wide range of materials. Simply, a wind turbine consists of a rotor that has wing shaped blades attached to a hub; a nacelle that houses a drive train consisting of a gearbox, connecting shafts, support bearings, the generator, plus other machinery; a tower; and ground mounted electrical equipment. The major cost components in the initial capital cost are usually classified as hardware cost, logistic cost, consumable costs, and land cost [3]. The revenues on the other hand are the sale revenue gained from the sale of generated power to the system operator. The technical lifetime is usually accepted as 20 years without renewing, however this might change as the cost changes. There are many uncertanities associated with the invesment decision and each uncertanity should carefully be included to the model for a better decision [4]-[6]. Under these conditions, a model that includes the turbine operation constraints and economic analysis is needed. In this paper, a model for wind turbine is developed and integrated with the economic analysis over the years. Section II gives overview of the model formulation and assumptions. Section III gives numerical results gained from the application. The conclusion is given in Section IV. II. OPERATION OF THE WIND TURBINE A. Model Formulation The energy extracted from a wind turbine is linearly related to the area and polynomial to the wind speed. The size of the blades and height of the tower which will determine the size of the investment will affect the power output. A wind turbine obtains its power input by converting the force of the wind into torque acting on the rotor blades. The amount of energy which the wind transfers to the rotor depends on the density of the air, the rotor area, and the wind speed. The formulae for the power in a wind turbine is given as p C AV Power Hub 3 2 1   (1) where A is the area, ρ is the air density, V is the wind speed and C p represents the coefficient of power. Area is also called the 'capture area' which is the location swept by the blades is the circler which is calculated as pi x Radius² as given below, A Simulation Approach to Evaluate Operational Economics of Wind Power Investments in Turkey Ahmet Yucekaya Journal of Clean Energy Technologies, Vol. 3, No. 5, September 2015 378 DOI: 10.7763/JOCET.2015.V3.227