Published on November 5th, 2012 | by Adam Johnston


Wind Costs Continued To Fall In Past Four Years: Report

November 5th, 2012 by  

Maintenance and capital costs for wind energy have continued to drop in recent years, according to a recent report.

Bloomberg New Energy Finance notes that, for onshore wind projects, operation and maintenance (O&M) costs have declined dramatically from €30,906 per megawatt (MW) in 2008 to €19,200/MW in 2012, a decrease of just over 11% a year, or a total of 38% for the period as a whole.

“O&M services have become an increasingly important revenue stream for manufacturers as the installed base of turbines has grown, and particularly during the industry’s current slowdown,” Bloomberg New Energy Finance notes. “Turbine manufacturers have been competing hard for service contracts, resulting in keener pricing.”

Meanwhile, survey participants believe O&M wind turbine costs will continue to stay steady until 2015, helping to make wind energy a more affordable energy investment choice.

“Wind power has done much to improve its competitiveness against gas-fired and coal-fired generation in recent years, via lower-cost, more technically advanced turbines, and more sophisticated siting and management of wind farms,” said Bloomberg New Energy Finance chief executive Michael Liebreich.

“This new O&M Price Index shows that servicing wind farms at the operating stage is also becoming much more cost-efficient,” he said.

For those who do not know, O&M costs include unscheduled and scheduled maintenance, and replacing component parts (gear boxes, turbine blades, and generators). These are very important in order to make sure wind farms run effectively and efficiently.

Bloomberg’s O&M price report consisted of data covering 104 undisclosed and disclosed O&M contracts from the Americas and Europe, contracts which involved 38 of the top wind developers.

Some other interesting statistics from the first of two yearly O&M reports include:

  • Average length of an operations and maintenance contract has increased by almost 2.5 years, from 4.5 years in 2008 to 6.9 years in 2012, citing manufacturers’ willingness to go for more long-term contracts.
  • The United States showed the most competitive O&M pricing, while the United Kingdom and Eastern European countries had the highest costs. Narrower local supply chains in both the UK and in Eastern Europe and higher wage costs were likely factors in contributing towards the UK and Eastern Europe’s less competitive costs.

As renewable energy sectors continue to mature, reports like this one will continue to give a firm gage on how these emerging industries are maturing. By looking over the numbers, the wind industry looks like it is blowing in the right direction.

Source: Bloomberg New Energy Finance

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About the Author

is expected to complete the Professional Development Certificate in Renewable Energy from the University of Toronto by December 2017. Adam recently completed his Social Media Certificate from Algonquin College Continuing & Online Learning. Adam also graduated from the University of Winnipeg with a three-year B.A. combined major in Economics and Rhetoric, Writing & Communications in 2011. Adam owns a part-time tax preparation business. He also recently started up Salay Consulting and Social Media services, a part-time business which provides cleantech writing, analysis, and social media services. His eventual goal is to be a cleantech policy analyst. You can follow him on Twitter @adamjohnstonwpg or check out his business

  • freedomev

    —————-Small wind can work well in urban areas if they are correctly installed at least 20′ above surrounding obsticales. There is no difference in how to install a urban or rural WT as long as you follow correct instaltion practice. Wind doesn’t care if it’s trees or buildings a long as you are well abive them into clean air.
    ———–Sadly most are done wrong with useless designs. Only well done 2-5 blade normal style units known to be good and have a record of cost effective production should be used..
    ———– Paul Gripes site is good and another Huigh Piggott’s sites are great with free plans to even build your own if reasonably handy. Or buy parts or turn key kits but make sure they have a good track record first.

    • Sorry to say freedomev, but I don’t agree with your view that urban and rural areas require same kind of Wind Turbines. Because in rural areas, wind can flow freely than the urban areas. However, when a busy urban area comes into frame, then there also sighted large number of closely packed buildings and skyscrapers and they definitely interfere with the wind directions resulting in turbulence. And that’s why urban areas are advised to install vertical axis wind turbines if closely packed. Nor, horizontal axis WTs do well and the installation procedure is definitely different for both.

      • Bob_Wallace

        Where’s the data which shows that VAWTs produce electricity at a competitive price?

  • freedomev

    ———A small detail is WT’s have also been better designed and made including recent ones that have eliminated the gearbox cutting O+M by 50% just for that. Also increasing size means fewer units to service.
    ———But by far the best in the future will be home, building size units as they save or make retail electric prices that are 2-3x’s as high as wholesale income after utilities, investors, bankers, etc take their bites. Best just eliminate all those parasites and make your own power Sadly their are few reasonably priced ones that actually work yet available but that will change.
    —————-Same with solar if you do your own shopping and hire the work done by the hr you can cut installed costs by 50%..

    • Ronald Brak

      An extremely small (and extremely quiet) very cheap wind power system would go well with rooftop solar in Queensland, NSW and other parts of Australia with minimal feed-in tariffs for solar. Unfortunately there aren’t any on the market yet, but we’ll see what the future brings.

      • freedomev

        ————–Depending on what you call extremely small a 1-2 kw
        3-5m dia 3bladed one can produce quite nice power making 2-40kwhrs/day depending on winds.
        ————-Few good ones are available but if you are handy or want to learn the real facts on these google High Piggott and read his websites and even have free plans for a quailty very long lasting anyone handy can make themselves. Even better start making them to sell for a nice profit. Parts are only $300-600 in materials and get the same output as 3-8kw of PV panels depending on size and winds.
        —————Best ones on the market are those made for boats but they are only 1.5-2m in dia but still puts out good power/$ on the better ones.
        ————— I’m building a more refined version with semi variable pitch blades without any extra parts to sell after it’s tested a yr. I can beat the Chinese on proce in the US and mine is designed to last 50 yrs like Hguh’s is and the Chinese mostly won’t last more than a few days.

      • Bob_Wallace

        Ronald – you might want to spend some time reading Paul Gipe’s site. He’s got a ton of great information, especially about ‘small wind’. Here’s a good page with which to start.

        Here’s his summary statement about urban wind…

        “Most, if not all, rooftop wind turbines simply don’t work. . Further, most of the internet wonders billed as “urban wind turbines” or “urban turbines” are simply a promoter’s dream and few if any have ever been installed.

        How can you tell? It’s simple. Look for promoters who claim their wind turbine is

        silent (always a dead giveaway),

        high production in low winds (perennial favorite of promoters),

        “certified” urban turbine (the certification is not for urban use, but only for general use),

        cheaper than everything else, and of course

        “too good to be true”.

        He’s got some pictures on the page of urban turbines that do work.

        • Ronald Brak

          Well, I’d expect small scale wind generation to first be used for off grid rural use, but it hasn’t taken off in that area yet, so I don’t expect it to appear for on grid use in a hurry. If designs are improved and if it can piggy back on solar installations by being installed at the same time as solar panels by the same people, then that may bring down the cost low enough to be competitive in places with high retail electricity prices and wind. I wish people working on it luck, but I don’t know if they’ll have it.

          • Bob_Wallace

            I live in an area where a lot of people are off the grid. A handful use turbines because they have uniquely windy sites (river canyons, for example). Most of us find that wind turbines won’t pay for themselves.
            Unless you have a site where the wind is funneled you’ve got to get up pretty high to find clean wind. And high in urban areas means getting well up above the skyline.

            In general, if you want to generate electricity from wind, go big. Commercial turbines are getting larger and larger. And higher and higher.

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