Onshore Wind Is The Cheapest Electricity Generation Option In Europe
Originally published on RenewEconomy. (Editor’s Note: the chart/calculation below assumes 25% wind capacity factory, while the norm is now much higher. Throw in 35% to 50% depending on your location in order to get a much better comparison.)
The falling cost of renewables is not news to those who have paid attention to analysis from green-focused think tanks, or groups like Bloomberg New Energy Finance. But it is when a major European utility, with equal exposure to fossil fuels, wind, and hydro, says that onshore wind is the cheapest of any new utility-scale technology.
That is the assessment of Portugal’s EDP, which has around 24 GW of generation, of which around 8.7 GW is in onshore wind.
In a recent presentation to analysts, EDP’s head of renewables Joao Manso Neto presented this slide below, which shows that the levellised cost of electricity of onshore win in Europe is 20 per cent cheaper than gas and one third cheaper than coal. (The figure assumes 25 per cent wind capacity factor).
These estimates are for Europe, but Neto suggested the cost difference is even greater in the US, where recent contracts have been struck between $20/MWh and $40/MWh. That’s despite the so-called shale gas boom, which brought down costs of gas-fired generation for a short period, but still cannot compete with wind.
“It is clear, more and more, that our product (wind energy) is good, not just because it is green, but because it is cheaper,” Neto told the analysts. (You can see the presentation here). He said wind energy is also cheaper than gas in key emerging markets such as Brazil, South Africa, Mexico, and major Asian markets.
Neto admits that the short-term outlook in Europe remains challenging because there remains a misperception.
He might have been referring to the likes of former Queensland Treasurer Keith De Lacy, who in the front page lead for The Australian today said renewables had “no place in a modern society.” And he might have been referring to people like Institute of Public Affairs’ Alan Moran, who insists that that wind energy is “three times” the cost of coal.
Neto says “the less educated” typically refer to the spot price, but this only reflects market dynamics and the level of supply and demand, not the cost of the technology. New build coal is also “three times the market price.”
In Australia, and other similar countries, incumbent generators and those that seek to protect them, are simply trying to stop the introduction of new generation – be it green or brown or black – because it will make older and less efficient coal and gas generators uneconomic. The Minerals Council of Australia makes this clear in its submission to have the renewable energy target dumped.
“Wind is not only competitive, it is prepared to compete,” Neto says. But to do that, it would need an equal playing field, such as the removal of the fossil fuel subsidies that add to half a trillion dollars worldwide. If the world is to decarbonise, and accelerate the withdrawal of polluting power stations, then wind will clearly be a winner.
Bloomberg New Energy Finance said in a note to clients that statistics already show that onshore wind can have a lower cost than gas or coal. The cost of onshore wind is in the range €42–€78/MWh, compered to CCGT (base load gas) at €62–€98/MWh and coal at €75–€90/MWh.
“The conclusion is clear: wind is competitive in many locations,” BNEF says. “The competitiveness of wind is not a new story.”
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
CleanTechnica Holiday Wish Book
Our Latest EVObsession Video
CleanTechnica uses affiliate links. See our policy here.
Awesome, now cue the naysayers who say , but but it is intermittent and not near the cities!
But wind isn’t intermittent. It just shifts around from place to place. Build several well-separated wind farms and you’ll get wind power with relatively little variability. And it’s so cheap that it’s worth building transmission lines to get it to the cities. The naysayers can stick it in their collective ears. (Mmmm, is that too rude? Maybe I should just say, “The naysayers are wrong.”)
No, it is intermittent as the wind is beyond the network’s control at occurs at irregular intervals at not at the correct times which funnily enough is what the definition of the word is! Wind is highly predictable with a week notice and solar even more so, but that doesn’t change it being intermittent.
Secondly the wind farms need to be separated by at least a 1000 miles to make sure that that the wind is from different pressure systems for there to be little variability as possible. Which currently isn’t done but being pursed by building interconnectors and changing the way countries sell and buy electricity from each other.
One think the article doesn’t mention is the variance among the European nations as Europe is not a single entity. Each country has a different sets of skills, wind manufacturing base, cost of land and approval process. So it would be nice to see which country is the cheapest for onshore wind (I assume Germany?) and most expensive.
Intermittent entered into English in the 1600s. It’s Latin and derives from intermittere.
It means that which gets interrupted unpredictably.
Intermittent has nothing to do with needed grid load of a people. Wind arises from planetary forces. Electrical consumption arises from individual desires.
Your definition seems to come from the WordNet project of Princeton. It should be noted that dictionaries are collection of usages whether right usages or not.
The WordNet definition includes “irregular intervals”, which is an oxymoron.
An interval is a measured length of time or space. The Middle English word derives from the Old French entrevalle in turn from the Latin intervallum meaning the regular distance between ramparts.
That which is irregular fails to conform to rule. Thus when one has said “irregular intervals” in truth, that one has said random distances between various markers.
Bird death detractors, we’re waiting for you with hundreds of millions of outdoor kitty cat bird deaths not to mention millions more from communications towers skyscrapers.
And being a technology-based source of energy, as opposed to fossil fuels which are resource-based , it will only get more competitive.
Interesting is the entire research, ‘on-shore’- PV being cheaper than off-shore wind.
Off-shore wind being the most expensive, nearly.
The price/kWh for a new PV-System is certainly cheaper than the reported 13,7 €cents/kWh.
I wonder where the price for atomic electricity came from?
No atomic reactor went online in Europe in the last couple of years, decades.
And the price for the two in the construction phase (France and Finland) since more than a decade can’t be in now.
Maybe some renovation project from Czechia?
Nope, there were just some turbine uprgades. But extra 2×250 MW “for free” retrofits wasn’t such a bad deal.
This must be the case.
Whilest we can’t follow the cost calculation for atomic power ( since is not imaginable) all we can see is the actual price of the sold electricity.
But this in turn isn’t covering the costs.
For the RE the total cost is usually priced-in: land purchase, demolition, recycling.
In related news: Dutch trains now powered by wind.
http://www.railway-technology.com/news/newseneco-to-power-electric-trains-with-green-energy-in-netherlands-4269898
I thought we published on that already. Think it’s scheduled for Monday.
And wind becomes more competitive after every long range EV on roads. Because long range EVs are great for adjusting wind power, because they can be charged to 95 % mostly on the most windy day of the week.
unexpected that solar is this expencive. i have seen post of 5cent$ per kWh for new solar.
There is a difference between California and most of Europe, when it comes to amount of sun. 😛