U.S. Department of Energy report: Wind power costs near record low

6 August 2013 by Elizabeth Salerno Elizabeth Salerno
The U.S. Department of Energy has released its Wind Technologies Market Report 2012, with some exciting findings concerning the cost of wind power.  Highlights:

-  Capital cost continues to drop, hitting an average of $1,940/kW for the capacity installed during 2012. (Note: many of the megawatts of new capacity installed in 2012 were purchased in 2010/2011 at those prices, so capital costs should drop further as lower-cost turbines sold during 2011/2012 are installed in 2013/2014.)

- The average cost of energy as reflected in power purchase agreements (PPA) for wind is similarly continuing to fall, with the average PPA price signed during 2012 of $38.34/MWh, down from $42/MWh for PPAs signed during 2011 and $60/MWh for PPAs signed during  2010.  Regional PPA prices for 2012 range from $31-$84/MWh.
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
- The capacity factor of new wind projects continues to increase, hitting an average for turbines installed during 2011 (operating a full year in 2012) at 33%, adjusting for curtailment (wind projects are sometimes "curtailed"--turned off--at times of low electricity demand).  Note: Turbines installed during 2012 don’t have a full year of operation as yet, so we will find out what their average capacity factor is after a full generation year in 2013.

- The domestic content of new wind turbines installed in the U.S. continued to hold steady in 2012 at approximately 70 percent.

This new report is further evidence of what we have been seeing from other sources, in particular utilities reporting on the very favorable prices of new wind projects. With its combination of lower prices and improved performance, wind is becoming a strong competitor.
 
Related articles:

Wall Street Journal highlights cost competitiveness of new wind projects, August 1, 2013
4,000 MW and counting: Xcel Energy punctuates busy first half of 2013 for RFPs, contracts, July 25, 2013
Citing low costs, Xcel Energy plans 'significant increase' in wind purchases, July 11, 2013
DNV KEMA: Accuracy of wind farm energy assessments improving, July 9, 2013
President's speech highlights wind power's benefits for both 'red' and 'blue' states, July 5, 2013
Wind tax credits a no-cost way to avoid greenhouse gas emissions, June 20, 2013
Fact check: Exelon's faulty math (and logic) on wind's consumer benefits, June 11, 2013
Mid-American Energy announces $1.9-billion investment in additional wind generation capacity, May 8, 2013
WINDPOWER 2013 Update: Analysts see future market of 4-8 GW/year in U.S., May 8, 2013
Georgia Power to acquire 250 MW of wind; utility underscores strategy of portfolio diversity, April 29, 2013
Buffalo Dunes Wind Project: A lesson in export, affordability, and transmission, April 23, 2013
Fact check: Attack by Locke Foundation's Sanders on N.C. RPS relies on flawed data, April 3, 2013
Fact check: Tang Energy's Jenevein off target with swipes at wind power, April 2, 2013
LBNL report: Low natural gas prices haven't detracted from wind's hedge appeal, March 11, 2013
Fact check: Pacific Research Institute report by Benjamin Zycher filled with inaccuracies, January 28, 2013
Despite flaws, DOE collaborative report shows more wind and transmission saves ratepayers money, January 23, 2013
Fact check: Marshall Institute attacks wind power, ignores facts, January 15, 2013
Fact check: Study on turbine lifespan 'just more anti-wind propaganda', December 24, 2012
Fact check: American Tradition Institute's Taylor and Tanton blowing smoke on wind incentive, December 20, 2012
TVA named 'Utility of Year' for pioneering wind power in Southeast, December 3, 2012
AWEA honors Alabama Power for using wind power to save dollars for Southeastern customers, December 3, 2012
Opinion: Wind energy delivers good value for Montana customers, November 26, 2012
First Wind's Bull Hill project now on line, highlights wind's affordability, November 20, 2012
Fact check: Exelon-funded report inflates wind integration costs, November 2, 2012
Alabama Power 'doubles down' on wind, October 9, 2012
The same everywhere you go: study highlights U.K. farmers' need for small wind as price hedge, October 5, 2012
Fact check: Charles Koch gets it wrong on wind power's cost, September 12, 2012
Western governors' report highlights utility integration reform needs, August 2, 2012
Homegrown wind energy cost effective, clean choice to meet increased electricity demand in British Columbia, report finds, June 25, 2012
Wisconsin PSC: RPS has economic benefits, negligible rate impact, June 25, 2012
IEA report finds cost of wind generation dropping as technology improves, June 7, 2012
WINDPOWER 2012 Update: Transmission for wind in western U.S.: Lower cost, lower variability, June 5, 2012
Wind technology advancing rapidly, challenges remain, June 4, 2012
Fact check: Elliott off target on wind and cost savings, June 4, 2012
Fact check: Heritage's Kreutzer errs on cost of wind power, May 29, 2012
New study: Wind power can save Midwestern consumers between $3 billion and $9.5 billion annually by 2020, May 23, 2012
PTC, wind power bring cost savings to Iowa utility customers, May 10, 2012
Fact check: Heartland's Kaminsky misguided on wind incentives, April 19, 2012
Fact check: Lomborg lacking on wind's economics, emissions reductions, March 23, 2012
Texas city nears wind and gas power deal, eyes savings, March 22, 2012
Mich. Public Service Commission: Renewable energy cheaper than coal, March 2, 2012
Fact check: American Enterprise Institute epic FAIL on study of wind costs, February 29, 2012
Fact check: Bryce bypasses facts, bashes clean energy, February 24, 2012
California PUC: Renewable energy procurement up in 2011, costs falling, February 8, 2012
Mythbusting facts about renewable energy in the southern U.S., February 7, 2012
More savings for ratepayers in Southeast as Louisiana utility ups wind purchases, January 26, 2012
Fact check: Trzupek Washington Times op-ed off base on wind's cost, utility integration, January 25, 2012
Southeast sees consumer savings, jobs from wind, but tax credit extension needed, January 10, 2012
Is wind power holding electricity costs down?, January 3, 2012
Renewable energy adoption and the increasing cost of electricity in the U.S., December 20, 2011
Fact check: Politico op-ed gets it wrong on wind costs, December 19, 2011
Fact check: Kavulla off target on wind's cost, December 12, 2011
Fact check: Myhrvold off target on energy incentives, November 29, 2011
Wind power increasingly competitive and productive, new reports find, November 10, 2011
National lab report: Wind turbine prices drop as designs improve, U.S. supply chain develops, November 1, 2011
Xcel Energy: More wind, less cost, October 31, 2011
Fact check: Bryce again misinforms on wind costs/benefits, October 20, 2011
Citing lower costs, Mich. utility slashes renewable energy surcharge, September 8, 2011
Mythbusting fact: Wind power is not expensive, June 27, 2011
Unconventional wisdom: Wind power is not expensive, April 4, 2011
EWEA study: Wind energy cuts carbon emissions, electricity prices, April 23, 2010