At the heart of this good news is the fact that wind turbine technology is improving. New technology means not only lower costs to produce wind turbines but also increased turbine productivity. The results of these improvements are seen in the comprehensive data collection of wind power costs in reports by Lazard, the Department of Energy, the Energy Information Administration, and comments made by top utility executives from around the country.
Here are the top 5 reasons we know wind is the becoming the most affordable choice for America:
1) New Lazard report shows impressive decline.
Released just last week, a new report by the financial services firm Lazard found wind’s costs have declined more than 50 percent over the past four years.
“Wind costs continue to decline; we estimate that the LCOE of leading technologies has fallen by more than 50% in the last four years. While many had anticipated significant declines in the cost of utility-scale solar PV, few anticipated these sorts of cost declines for wind technology.”
2) Electric utility leaders from around the country agree–wind power is affordable.
As wind energy prices decline, and electricity consumers and utilities are faced with choices about new electricity generation, wind energy is increasingly a competitive choice. With improving technology and siting techniques, wind energy is becoming one of the most affordable forms of electricity today.
Here's what electric utility representatives are saying:
July 16, 2013 – “Wind prices are extremely competitive right now, offering lower costs than other possible resources, like natural gas plants.” – David Sparby, president & CEO of Xcel Energy’s Northern States Power, announcing 600 MW of new wind power contracts.
July 22, 2013 – "Low-cost wind energy provides [Arkansas Electric Cooperative Corp.] with a hedge against fluctuating natural gas energy prices … We will continue to pursue energy options that allow AECC’s member cooperatives to provide reliable electricity at the lowest possible cost.” – Duane Highley, president & CEO of Arkansas Electric Cooperative Corp., after signing a 150-MW wind contract
August 12, 2013 – “The expansion is planned to be built at no net cost to the company’s customers and will help stabilize electric rates over the long term by providing a rate reduction totaling $10 million per year by 2017, commencing with a $3.3 million reduction in 2015.” – MidAmerican Energy Co. press release after a recent Iowa Utilities Board decision to allow the utility to build 1,050 additional megawatts of wind generation in Iowa.
3) Actual contract prices and capital costs have dropped, as documented by the United States Department of Energy.
With this month’s release of the Department of Energy’s Wind Technologies Market Report 2012 came news that wind power costs are even lower than last year.
The report found capital cost to develop wind power continues to drop, the average cost to purchase electricity provided by wind is falling (see chart below), the capacity to draw more electricity powered by wind continues to increase, and domestic content of new wind turbines installed in the U.S. continues to weigh in at (approximately) a healthy 70 percent American made.
EIA reported recently that wind energy is one of the most affordable options for new electricity generation, alongside new natural gas units.
The EIA data is consistent with an earlier report from investment analysis firm Lazard, prepared for the Midwest regional utility system operator, similarly demonstrating wind power’s cost competitiveness. EIA's data and analysis also squares with scores of real-world examples where utilities publicly praise wind power for lowering consumer costs.
Below is a chart using data from EIA that illustrates wind’s costs compared to other energy options:
5) Newspapers and trade media are catching on to the new reality of wind power's increasing competitiveness.
“Study finds price of wind energy in the U.S. near all-time low”
– Research & Development Magazine
“US Wind Power Prices Down To $0.04 Per kWh”
– Clean Technica
“Wind energy a wise investment”
– Kansas City Star editorial
“New study finds that the price of wind energy in the U.S. is near an all-time low”
– WindPower Engineering & Development
”Wind Power Growing, Becoming Less Costly”
– Earth Techling
“Go green to save green”– Amarillo Globe-News (TX) editorial
Across country, editorials spread good news on wind power, August 26, 2013
U.S. Department of Energy report: Wind power costs near record low, August 6, 2013
Wall Street Journal highlights cost competitiveness of new wind projects, August 1, 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 7, 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
[Press release] U.S. electric utilities flock to lower-priced wind power, February 20, 2013
Fact check: Pacific Research Institute report by Benjamin Zycher filled with inaccuracies, January 28, 2013
Fact check: Marshall Institute attacks wind power, ignores facts, January 15, 2013