United States

United States

Economics

With gas prices rising sharply in America in the last 12 months, the economics of wind's strongest competitor, combined cycle gas turbines, could be in for a downturn. In the first quarter of 1999 the average price of gas sold to electric utilities was $0.0075/kWh, but by the second quarter of 2000 it had moved to $0.012/kWh and is expected to peak at around $0.015/kWh, making the price of CCGT dearer than coal fired plant. The rise appears to be a market response to growing demand, rather than higher oil prices. Substantial new gas reserves have recently been confirmed, however, which may reverse the trend. Gas prices in Europe are joining the upward trend, but the rise is apparently not yet reflected in market prices. Wind on the other hand shows no sign of losing its competitive edge. Prices have moved significantly downwards during the past four years, as reported in the latest WindStats, Windpower Monthly's quarterly publication. Further gains in productivity seem certain with orders flowing in strongly, if for no other reason than economies of scale in production.

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