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WindEconomics: US costs fall as turbine ratings increase

The latest report from the Lawrence Berkeley National laboratory (LBNL) in the US chronicles the continuing development of wind energy, accompanied by steady falls in costs of both projects and energy.

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The interior region had the cheapest energy, with an average price of $34/MWh, and some as low as $27/MWh.
The nationwide average, for projects built in 2018, was $36/MWh.

The price of gas-fired generation has been falling for several years, and the US-wide average in 2018 was $33/MWh. However, where gas prices are above-average, wind can compete, and the production tax credit (PTC) also assists wind.

As a result, the average power purchase price in 2018 was $11/MWh.

It is worth noting that the corresponding price for solar was $23/MWh, and the low American electricity prices may be compared with the average wholesale price in the UK, which was about $60/MWh in the first half of 2019.

Falling turbine prices

The average installed cost in the US in 2018 was $1,468/kW, down $200/kW from 2017.

Average wind-turbine prices — based on the annual reports of Vestas, Siemens Gamesa and Nordex — was around $885/kW. The steady downward trends since 2011 are shown in the chart below.

The trend for completed projects lags behind that for turbines. LBNL notes that "a limited sample of under-construction projects suggests somewhat lower costs in 2019".

The US was second only to China in capacity installed last year — 7,588MW — for a total of 96,433MW at the end of 2018.

The American Wind Energy Association (AWEA) reported the US had reached 98GW by the end of June, while Windpower Intelligence, the research and data arm of Windpower Monthly, is now recording over 100GW.

Economies of scale

One of the reasons why installed costs, and the cost of energy, have continued to fall is that turbine ratings continue to increase.

This leads to "economies of scale" — fewer machines are needed to generate a given amount of electricity — and there are savings in various ancillary costs, such as the electrical interconnections and the costs of transport.

The chart below shows how turbine sizes and ratings have increased since 2010. Rotor diameters have grown, on average, from 80 metres to 88 metres, while hub heights have risen from 84 to 116 metres.

As the taller turbines access higher wind speeds, it becomes more economical to use slightly higher ratings, and this is reflected in an increase in average rating from 1.79MW to 2.43MW; with specific power ratings improving from 359W/m2 in 2010 to 399W/m2 in 2018.

Outlook

The outlook for the future is mixed. AWEA reports that a record 41,801MW of wind capacity is currently under construction or in advanced stages of development.

The Lawrence Berkeley report suggests up to 12GW may be completed this year and up to 15GW next year, after which there is likely to be something of a downturn, partly due to the phasing out of the PTC.

The continuing reductions in prices may counter this trend, although much depends on what happens to fossil-fuel prices.

Power yields: Putting year of low winds in perspective

About the same time as our article on predicting wind-farm performance was published last month, it was reported that the UK-based infrastructure group John Laing had paused its investments in wind energy on the grounds that wind-speed levels in Europe had been lower than predicted over the past 18 months.

The company has commissioned a long-term forecast as a result.

Last year was, indeed, a year of relatively low wind in both the UK and Denmark.

Average wind speeds at some locations recorded by the UK’s Department for Business, Energy and Industrial Strategy were 3% below the ten-year mean, and the Danish wind index — which refers to energy rather than wind speed — was 0.89.

However, neither of these values was exceptional. UK wind speeds were slightly lower in 2016, and– the Danish wind index was similar. On the other hand, in 2015, both figures were above the long-term mean.

Other studies have shown similarities between the wind indices in several European countries. The chart below shows the trends in both parameters back to the turn of the century.

Global warming

It is not clear why John Laing is concerned, but there could be another area of uncertainty: whether the effects of global warming are likely to cause significant changes in wind speeds.

Data published by the UK government suggest average wind speeds fell by 2% in 2010-18. A more detailed study also indicates there may be small changes that will vary from place to place.

However, significant erosion of the wind-power potential is unlikely.

The table below summarises results from a number of studies. The North American and European studies specifically look forward to the years ahead; the remainder examined trends to see if there was clear evidence of a sustained increase or decrease.

Whether looking at forward projections or current trends, there is little evidence to suggest that climate change is going to have significant impacts on the viability of wind energy in most areas, although some studies do suggest there may be a few locations where changes may be more marked.


At a glance — This month’s report conclusions

2018 Wind Technologies Market Report, Mark Bolinger and Ryan Wiser, Lawrence Berkeley National Laboratory Details continuing upward trend in turbine sizes and downward trends in costs

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