Wind energy prices in the United States “are at rock-bottom levels” and continue to remain attractive to utility and commercial purchasers, according to a new US-centric wind energy report.
Prepared by the Electricity Markets & Policy Group at Lawrence Berkeley National Laboratory (Berkeley Lab) for the US Department of Energy, the Wind Technologies Market Report confirmed several existing conclusions made in recent months about the US wind industry in 2015, and revealed several more. Prime among these conclusions is confirmation that wind prices are at an all time low, with newly built wind projects in the US averaging around 2¢/kWh thanks to technology advancements and cost reductions across the wind industry.
“Wind energy prices — particularly in the central United States — are at rock-bottom levels, with utilities and corporate buyers selecting wind as the low-cost option,” said Berkeley Lab Senior Scientist Ryan Wiser. “Moreover, enabled by technology advancements, wind projects are economically viable in a growing number of locations throughout the United States.”
We’ve known for a while now that wind power represented the largest source of US electricity generating capacity additions in 2015, which is testament not only to the attractiveness of the technology to begin with, but also the looming (though no longer threatening) deadline of the wind production tax credit. A total of $14.5 billion was invested into 8.6 GW of new capacity in 2015, accounting for 41% of all US generation capacity additions in 2015.
What’s interesting is the role that bigger turbines are having on wind project performance, with the average capacity of wind turbines installed in the US growing 180% to 2.0 MW, and an average hub height increasing by 47%.
Technology advancements as a whole have increased the industry’s overall performance, as structures become taller and more economically efficient, blades become more efficient, and the mechanics of a turbine similarly increase project performance. Increased rotor diameters are a particular technological improvement which is having a dramatic impact on wind project capacity.
All this technological advancement has been paralleled by increases in the manufacturing process of the self-same technologies, which has helped drop wind turbine pricing by 20% to 40%. Wind projects built in 2015 had an average installed cost of $1,690/kilowatt(kW), down $640/kW from the temporary peak in 2009 and 2010.
Unsurprisingly, therefore, wind energy prices have similarly decreased, and remained low. After hitting a temporary high of 7c/kW in 2009, the average levelized long-term price from wind power sales agreements has now dropped to around 2c/kW.