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The cheapest new generation in much of the world: turbines on land turning wind into power. The economics are simple physics and finance: capacity × hours × capacity factor × power price, against a tiny operating cost, with a contracted floor (a CfD or PPA) that can remove price risk. The whole investor question is merchant versus contracted, and the capacity factor that drives the output. Pick a real operator below and work through the project, the model and a working returns model.
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Drag the sliders to see what earns the money: the installed capacity, the power price (and how a contracted floor holds it up), and the capacity factor that physically drives the output.
Onshore wind is the simplest generation economics there is. The output is pure physics: installed capacity (MW) × the hours in a year × the capacity factor (how much of nameplate the site actually produces, ~28–48% for good onshore sites). That energy is sold at the power price, and because there is no fuel (the wind is free) the operating cost is tiny, just O&M, so the EBITDA margin is very high. The whole investment question is the price: sell it merchant into the spot market for higher expected return but real price risk, or fix it under a CfD or PPA that acts as a revenue floor and removes the price risk for a lower, safer return. The capacity factor makes the volume; the contract makes the risk.
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See also the Onshore wind simulator, which lets you build and dispatch a wind farm interactively, and the Cash-flow & DCF model.