See my answer to the question linked by PolyGeo. To get your points into ArcMap, export them as a CSV from Excel and then import that using
Add XY Data. I'm sure you understand that you do not use this data to edit the DEM (I don't mean to patronise you and only mention this because of the way you phrased your comment, which rang an alarm bell - but maybe that's just the way I read it).
From your question, there are a few points I think you need to consider:
- Be warned that 1,600 turbines is a LOT. From experience, this number of turbines will cover a very large area and, presuming you are using at least the OS 50 DTM (this is acceptable though the 10m resolution data is sometimes preferred) the analysis will take a very long time (probably more than one cup of coffee and depending on your computer's power it could be a few hours).
- To perform visibility analysis you not only need the coordinates for every turbine but also the tip and/or hub height (and use this for OFFSETA and set OFFSETB to 2).
- I'd recommend accounting for the curvature of the Earth and refraction of the air over these sorts of distances.
- In your analysis you may need to consider a few other factors such as screening by buildings and trees as the DTM provided by OS is 'bald Earth'. Conservative estimates for woodland blocks and buildings are usually acceptable (15m and 5m respectively are usually OK but you could use others if you can justify the values). You may wish to discuss the differences between actual potential visibility after you account for atmospheric haze etc and theoretical visibility (for instance research suggests that apart from the clearest days you'd be (un)lucky to see turbines much beyond 10KM whereas Scottish Natural Heritage requires ZTVs to be calculated up to 35KM for taller turbines). Screening by buildings is particularly pertinent in a town, where due to the visual equivalent of the canyon effect of the streets, most places in a town can't actually see any turbines, even where your theoretical visibility calculation suggests they can see many. So, if this is serious analysis, then the urban layout is a significant factor (a town with a large open market square where people gather may have a higher practical level of visibility than a more densely built-up urban area that apparently shows a higher ZTV score.
- You say you are looking to identify the town which can see the most turbines in the region. That is a rather vague term which needs some definition. Do you mean the town which contains a location with the highest number of visible turbines, or do you mean the town that can see the highest number of different turbines summed over all locations within the town, or possibly the town that has the highest average visible turbine count over the whole town area. What you can't do is sum the total visibility of each cell within the town limits because you will then be double-counting turbines and weighting the results towards larger towns.