In fact, buried deep within the Electricity Generation Costs report published by the Department of Energy and Climate Change (Decc) in late 2013, there is confirmation that the cost of a wind generating project from construction through its lifespan is actually cheaper than nuclear.
In a Decc table of levelised costs where each technology is assigned an approriate level of risk for investment purposes, nuclear attracts a higher interest rate than onshore wind. On this basis, it is cheaper than nuclear in 2020, see chart below.
PV beats all by 2030
The costs of nuclear generation are forecast to fall more rapidly than wind after 2020, and by 2030 the same figures for nuclear undercut those for wind. However, photovoltaic generating costs may fall faster than wind or nuclear, making PV the cheapest source of the three by 2030.
Another interesting point shown in the chart is that the figures for combined-cycle gas turbines (CCGT) are higher than those for wind by 2030. This indicates that Decc anticipates significant increases in gas prices by that time. Decc also envisages slow progress with carbon capture and storage as there are no generating costs quoted before 2025.
By 2030 the anticipated generation cost from CCGT, with carbon capture and storage, is estimated at £104/MWh ($169/MWh), significantly higher than nuclear (£77/MWh), onshore wind (£85/MWh), or PV (£70/MWh). No figures are given for tidal stream or wave energy.UK in top cost range for most technologies
The generating cost estimates for the UK tend to be towards the top end of global cost ranges. A recent report from the International Renewable Energy Agency (Irena), Renewable Power Generation Costs in 2012, confirms this, and suggests the generating cost range for onshore wind will change little between now and the end of the decade. By then, Irena expects it to be in the $40-140/MWh range. At $137/MWh, UK costs remain at the high end of the range.
The lowest price is only matched by biomass co-firing, hydropower and geothermal. The generation costs from the latter two technologies are, however, very site-dependent and the minimum level can only be achieved in very favourable locations.
Both Irena and the UK's Decc expect substantial reductions in offshore generation costs to be achieved by 2020. The estimates produced by the two organisations for that date are similar. Irena suggests offshore wind now costs $160-240/MWh, which will fall to $140-210/MWh by 2020. Decc indicates offshore wind now costs around $238/MWh, and that it will fall to around $170/MWh by the end of the decade, which is roughly in the middle of the range quoted by Irena. Decc quotes the likely range as $145-188/MWh.
The Irena report estimates generation costs for eight regions of the world: OECD Europe, OECD North America, Africa, eastern Europe and central Asia, other Asia, China, India and Latin America. The most expensive regions for onshore wind are Europe and Asia, while the cheapest are China and India. Africa and Latin America are slightly cheaper than Europe, not just for wind but most other technologies too. Photovoltaic costs vary widely, but nowhere is the average cheaper than wind.Latin America stands out for wind energy
The Irena report suggests Latin America may be one of the best regions for wind energy, based on high-capacity factors - the annual power output compared with total power potential from turbine plated capacity.
In Latin America, the average capacity factor is around 45%, significantly ahead of Africa's 33%. The least favourable non-Organisation for Economic Co-operation and Development (OECD) region appears to be India, where the average capacity factor is around 23%. A full list of capacity factors in OECD regions is not supplied, but the most recent data from the US suggests it is about 33%.
In the December issue, we looked at the cost of nuclear power in the UK, given the government £10 billion loan guarantee. The required increase to the strike price of £92.5/MWh if the internal rate of return rose by just 1% should be £10/MWh, not £20/MWh as we reported.