Riding on the technological improvements, the cost of wind power generated electricity is continually falling with the US and Denmark witnessing an all-time low price, according to a new report by IEA Wind- a cooperative technology research and analysis effort of the International Energy Agency.
The new report-‘The Past and Future Cost of Wind Energy’- is aimed at understanding factors which have influenced the cost of delivered wind energy in the past and using that information to estimate future cost trends. Researchers from the Lawrence Berkeley National Laboratory (LBNL) and National Renewable Energy Laboratory (NREL) worked on the report along with European analysts.
Some of the major findings of the report are as follows:
• Between 1980 and the early 2000s, significant reductions in capital cost and increases in performance had the combined effect of dramatically reducing the levelized cost of energy (LCOE) for onshore wind energy.
• Beginning in about 2003 and continuing through the latter half of the past decade, wind power capital costs increased—driven by rising commodity and raw materials prices, increased labor costs, improved manufacturer profitability, and turbine upscaling—thus pushing wind’s LCOE upward in spite of continued performance improvements.
• More recently, turbine prices have declined, but still have not returned to the historical lows observed earlier in the 2000s. At the same time, performance improvements have continued. As a result, modeling based on capital cost and performance assumptions from the United States and Denmark for projects expected to be built in 2012–2013 suggests that the LCOE of onshore wind energy is now at an all-time low within fixed wind resource classes.
• Recent capital cost and performance trends have underscored the need for a view of the cost of wind energy that equally weighs both trends in capital cost and performance, particularly when trying to understand future costs.
• The technology is now at a point where an optimal cost of onshore wind energy may result from little or no further capital cost reductions, but continued performance improvements.