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Annual Power Costs Comparison: Wind and thermal generation 2009

A wide range of variables determines the cost of constructing and operating power stations, as the cost ranges plotted above for coal, nuclear, gas and wind generation costs indicate. Fuel prices strongly influence the cost of coal and gas generation. The risk of expensive construction overruns adds a variable premium to nuclear, while wind speeds are the decisive factor for the cost of wind power.

Wind's key advantage over its thermal competitors is that investors have control over generation cost for the life of the plant: mean site wind speed and the cost of a fully installed wind plant are known from the outset. A wind project's generation cost is fixed with a high degree of certainty over 20 years and more. Wind power is cheapest when a plant is built on a windy but easily accessible site close to the electricity grid, which can bring its cost down to EUR1200/kW or less. But high wind speeds are not likely in such locations. Stronger winds are found in remote locations, where it is usually more expensive to build a wind farm but, given high wind speeds, a plant costing EUR1800/kW can be fully competitive.

The EUR1200-1800/kW installed cost range for 2009 is based on the reported cost for wind projects for the central two-thirds of more than 4 GW of wind power. Current coal, gas and nuclear costs are from a consensus of recognised sources. The range depicted for wind power's cost takes into account markets with low winds, such as Germany and other places in central Europe, where wind farm costs can be high and wind speeds low, as well as high wind regions of the world with wind farms, such as New Zealand and South America. The price of carbon emissions allowances is capped at a modest EUR30/tonne. Should it go higher, most wind power will undercut the price of fossil fuel generation. Much wind power today is competitive.

Main Annual Power Costs Comparison article

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