Commercial Scale

Wind Energy Costs Trending Down

“More efficient turbines are generating greater amounts of wind power at lower costs.”

—Peter Asmus,
Pike Research senior analyst

Since 2008 wind turbine prices in the U.S. have fallen by nearly one-third on average, according to a new report from Lawrence Berkeley National Laboratory (Berkeley Lab). "Understanding Trends in Wind Turbine Prices Over the Past Decade" examines how $-per-kW costs have declined in recent years, after having previously doubled over the period from 2002 through 2008. Berkeley Lab analyzed price data on a sampling of U.S. wind turbine transactions totaling 23,850 megawatts from 1997 through early 2011.

Wind Energy Cost Drivers

In conjunction with improvements in turbine design and performance, falling turbine prices enable the latest generation of wind power projects to profitably sell electricity at prices well below what was common several years ago. The Berkeley Lab report examines seven primary drivers of wind turbine prices in the United States, with the goal of estimating the degree to which each contributed to the recent trend:

  • Labor costs, which have historically risen during times of tight turbine supply
  • Warranty provisions, which reflect technology performance and reliability
  • Turbine manufacturer profitability, which can impact turbine prices independently of costs
  • Turbine design, which is principally manifested through increased turbine size
  • Raw materials prices, which affect the cost of inputs to the manufacturing process
  • Energy prices, which impact the cost of manufacturing and transporting turbines
  • Foreign exchange rates, which can impact the dollar amount paid for turbines and components imported into the United States

Wind Energy Outlook

The U.S. Department of Energy has set a goal of obtaining 6% of U.S. electricity from wind energy by 2020. That goal is consistent with the overall rate of growth for wind in the U.S., even though the industry has been subject to boom-bust cycles from year to year. According to a new report from Pike Research, total installed wind capacity in North America will more than double over the next six years, increasing from approximately 53,000 megawatts in 2011 to almost 126,000 megawatts by 2017.

"This will be another difficult year for wind power in North America, but we do see signs of recovery," says Peter Asmus, Pike Research senior analyst. "Larger, more efficient turbines are generating greater amounts of wind power at lower costs, and both the U.S. and Canadian governments have shown strong commitment to the wind industry during this challenging economic time."

Wind energy generation costs have declined over time to a current range of 6-9 cents per kilowatt-hour with an average of 8.2 cents, according to the National Renewable Energy Laboratory. Researchers and policy-makers are looking for ways to continue to lower the kilowatt hour cost of wind energy systems for effective growth and for related economic benefits.

Wind Energy Research

Researchers at Iowa State Univesity with wind blade

Iowa State University researchers with TPI Composites turbine blade
photo: Iowa State University


One research project is finding better ways to manufacture wind turbine components in the U.S. through a joint project of Iowa State University's Wind Energy Manufacturing Laboratory, U.S. Department of Energy's Sandia National Laboratories, and TPI Composites, a blade manufacturer. The researchers are using high-precision lasers to analyze wind turbine blades for minor defects and working to improve wind blade design and fabrication techniques.

The researchers' goal is to develop new, low-cost manufacturing systems that could improve the productivity of turbine blade factories by as much as 35 percent, which would support an avearge cost reduction to 6 cents per kilowatt hour by 2020. "Manufacturing in this industry is done largely by hand," says associate professor Frank Peters. "Our goal is to find ways to automate the manufacturing."

Information Resources

Use the following links for more information from cited sources:

Berkeley Lab report - "Understanding Trends in Wind Turbine Prices Over the Past Decade"

National Renewable Energy Laboratory - Open Energy Information

Pike Research - Wind Energy Outlook for North America

Iowa State University - Wind Energy Manufacturing Lab helps Iowa State engineers improve wind power

A Visual Impact Assessment Process for Wind Energy Projects

Visual impacts associated with wind development projects are often among the issues of greatest concern for surrounding property owners and the community. A guide issued by the Clean Energy States Alliance, A Visual Impact Assessment Process for Wind Energy Projects, provides an effective and objective aesthetic impact assessment review methodology that provides clear guidance for developers, planners, and regulatory decision makers and also ensures the protection of important scenic and cultural resources.

“As wind development continues to grow throughout the United States, many state and local governments are in the process of creating or revising their evaluation processes for assessing visual impacts of wind energy projects,” states the report. “There is little consistency as to what information should be submitted by a wind developer to the relevant regulatory review body. The basis for evaluating and determining the degree of visual impacts presented by proposed wind projects is often poorly understood by regulators, developers, and the general public. Establishment of clear and consistent visual impact review processes will assist developers and regulators alike and provide greater public confidence in the integrity and fairness of regulatory decision making for wind project siting.”

A Visual Impact Assessment Process for Wind Energy Projects is available on the CESA website.

Clean Energy States Alliance (CESA) is a nonprofit coalition of state clean energy funds working together to develop and promote clean energy technologies and markets. 

2010 Wind Technologies Market Report

U.S. Department of Energy logoThe U.S. Department of Energy released the  "2010 Wind Technologies Market Report,"  prepared by Lawrence Berkeley National Laboratory, providing a comprehensive overview of trends in the U.S. wind power market.  Despite a trying year in which wind power capacity additions declined significantly compared to both 2008 and 2009, the U.S. remained one of the fastest-growing wind power markets in the world in 2010-second only to China-according to the report.

Wind power comprised 25% of new U.S. electric capacity additions in 2010.

Wind power comprised 25% of new U.S. electric capacity additions in 2010 and represented $11 billion in new investment. Wind power contributes more than 10% of total electricity generation in four states, and provides more than 2% of total U.S. electricity supply.

2010 Wind Technologies Market Report cover

Roughly 5 GW of new wind power capacity were connected to the U.S. grid in 2010, compared to nearly 10 GW in 2009 and more than 8 GW in 2008. "The delayed impact of the global financial crisis, relatively low natural gas and wholesale electricity prices, and slumping overall demand for energy combined to slow demand for new wind power installations in 2010," said Ryan Wiser, a scientist at Berkeley Lab and one of the authors of the study.

Some key findings of the study include:

  • Due to the size and promise of the U.S. market, wind turbine manufacturers continued to localize production domestically in 2010, despite the relatively slow year.
  • A growing percentage of the equipment used in U.S. wind power projects is domestically manufactured.
  • Wind turbine prices have declined substantially since 2008.
  • Technological advancements have improved wind turbine performance, particularly at lower wind speed sites.
  • Turbine price reductions, coupled with improved turbine technology, are expected to exert downward pressure on total project costs and wind power prices over time.
  • Looking ahead, projections are for modest growth in 2011 and 2012.

Berkeley Lab's contributions to this report were funded by the Wind & Water Power Program, Office of Energy Efficiency and Renewable Energy of the U.S. Department of Energy.  The full report ("2010 Wind Technologies Market Report"), a presentation slide deck that summarizes the report, and an Excel workbook that contains much of the data underlying the report, can all be downloaded from the Berkely Lab website.

ARM Energy Solutions

ARM Energy Solutions (1998) provides engineering and environmental consulting to both public and private sector clients. ARM has branch offices in State College, Pittsburgh, Johnstown, Wilkes-Barre, Harrisburg, PA and Columbia, MD.

Services:

  • Wind Energy Engineering & Consulting Services
  • Economic and Financial Analysis
  • Meteorological Tower Installation
  • Wind Speed Data Collection and Analysis
  • Land Development Planning, Zoning
  • Approval, Permitting Civil Infrastructure Engineering Electrical
  • Infrastructure & Substation Design
  • Engineering GIS Mapping & Visual Impact Studies
  • Environmental Impact Assessments

ARM Website

1129 West Governor Road P.O. Box 797 Hershey, PA 17033

REDI Resources

Clean Energy Project Builder

Clean Energy Project Builder (formerly REDI Resources) is an online directory of community and small wind, and solar power companies from all over the United States who serve Minnesota’s clean energy industry. The directory allows you to browse companies; to search by specific services like engineering, operations & maintenance, or legal services; to find companies near you using geographic search; and to find companies through a range of other details like service area, number of employees, or completed project capacity.

Clean Energy Project Builder is a long-term resource provided through the collaborative efforts of the Southwest Initiative Foundation, Clean Energy Resource Teams, The Minnesota Project, and Windustry.

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