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Wind Energy Costs Near All-Time Low
Annual wind power additions boomed to a record level last year while prices plummeted close to an all-time low, according to a new DOE report by Lawrence Berkeley National Laboratory.
About 13.1 gW of new wind power capacity were added to the grid in 2012, due in large part to federal tax incentives scheduled to expire at the end of that year. At the same time, projects negotiating contracts with utilities averaged a price of $40 per mWh, which spurred demand. In fact, the cost of wind energy now rivals the lows set in 2003, especially in the central U.S.
However, low gas prices and continued policy uncertainty are creating headwinds for the industry, though a short-term extension of the tax incentives has delayed their expiration.
Other revelations in the study include:
- Wind power comprised 43% of all new electric capacity additions in the U.S. in 2012.
- Since 1998-99, the average capacity of wind turbines installed in the US has increased by 170%, reaching 1.94 mW in 2012. Additionally, the average turbine hub height has increased to 94 meters (a 96% jump). This means it has become more economical to build projects in areas with lower wind speeds.
- Turbine prices have fallen 20-35% from their 2008 highs, pushing project costs down almost $200 per kW from the reported average cost in 2011.