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Financial modeling of social and environmental impacts of wind farm in urban zones: a case study of Zawia-Libya

Abstract

This study presents both a physical and monetary evaluation of the key social and environmental impacts linked to the development of a 20 MW wind farm in Zawia, Libya. The analysis considers a range of externalities, including carbon footprint, water use, noise emissions, visual impacts, shadow and shadow flicker, land occupation, and potential electromagnetic interference. The project is planned on a 2 km² site and will incorporate 10 Gamesa G-114 wind turbines. Using the System Advisor Model (SAM) for energy yield estimation, the annual electricity generation reaches approximately 104,240.6 MWh. The project's initial capital cost is estimated at $39.36 million. The conventional levelized cost of energy (LCoE), calculated without factoring in social or environmental externalities, stands at $86.84/MWh. When externalities are monetized, they contribute an additional $7.92/MWh, representing nearly one-third of the operation and maintenance expenses ($25/MWh). If the evaluation internalizes only the carbon footprint, the LCoE decreases to $49.43/MWh. Conversely, when all social and environmental impacts are fully incorporated, the adjusted LCoE rises to $57.35/MWh. These findings highlight the critical importance of integrating external costs into wind energy assessments, providing a fairer comparison with conventional energy sources and strengthening the case for renewables in competitive energy markets.