Wind energy pays off
DOE/Lawrence
Berkeley National Laboratory
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With levelized costs of just over $30 per megawatt-hour (MWh) for newly built
projects, the cost of wind is well below its grid-system, health, and climate
benefits.
"Wind
energy prices -- particularly in the central United States, and supported by
federal tax incentives -- remain low even with ongoing supply chain pressures,
with utilities and corporate buyers selecting wind as a low-cost option,"
said Ryan Wiser, a senior scientist in Berkeley Lab's Energy Technologies Area.
"Considering the health and climate benefits of wind energy makes the
economics even better," he added.
Key
findings from DOE's annual "Land-Based Wind Market Report" include
the following:
•
Wind project performance has increased over the decades. The
average capacity factor (a measure of project performance) among recently
completed projects was nearly 40%, considerably higher than projects built
earlier. The highest capacity factors are seen in the interior of the country.
•
Turbines continue to get larger. Improved plant performance has
been driven by larger turbines mounted on taller towers and featuring longer
blades. In 2011, no turbines employed blades that were 115 meters in diameter
or larger, but in 2021, 89% of newly installed turbines featured such rotors.
Proposed projects indicate that total turbine height will continue to rise.
•
Low wind turbine pricing has pushed down installed project costs over the last
decade. Wind
turbine prices averaged $800 to $950/kilowatt (kW) in 2021, a 5% to 10%
increase from the prior year but substantially lower than in 2010. The average
installed cost of wind projects in 2021 was $1,500/kW, down more than 40% since
the peak in 2010, though stable in recent years. The lowest costs were found in
Texas.
•
Wind energy prices have risen, but remain low, around $20/MWh in the interior
"wind belt" of the country. After topping out at $75/MWh for
power purchase agreements executed in 2009, the national average price of wind
has dropped -- though supply-chain pressures have resulted in increased prices
in recent years. In the interior "wind belt" of the country, recent
pricing is around $20/MWh. In the West and East, prices tend to average above
$30/MWh. These prices, which are possible in part due to federal tax support,
fall below the projected future fuel costs of gas-fired generation.
•
Wind prices are often attractive compared to wind's grid-system market value. The value
of wind energy sold in wholesale power markets is affected by the location of
wind plants, their hourly output profiles, and how those characteristics
correlate with real-time electricity prices and capacity markets. The market
value of wind increased in 2021 and varied regionally from below $20/MWh to
over $40/MWh, a range roughly consistent with recent wind energy prices.
•
The average levelized cost of wind energy was $32/MWh for plants built in 2021. Levelized
costs vary across time and geography, but the national average stood at $32/MWh
in 2021 -- down substantially historically, though consistent with the previous
three years. (Cost estimates do not count the effect of federal tax incentives
for wind.)
•
The health and climate benefits of wind in 2021 were larger than its
grid-system value, and the combination of all three far exceeds the current
levelized cost of wind. Wind generation reduces power-sector emissions
of carbon dioxide, nitrogen oxides, and sulfur dioxide. These reductions, in
turn, provide public health and climate benefits that vary regionally, but
together are economically valued at an average of over $90/MWh-wind for plants
built in 2021.
Berkeley Lab's contributions to this report were funded by the U.S. Department of Energy's Wind Energy Technologies Office.
