The Future Cost of Wind Power : Capital costs, the levelized cost of electricity (LCOE), economics, costs and future outlook ...
04 August 2015 - 8:27PM
PR Newswire (US)
LONDON, Aug. 4, 2015 /PRNewswire/ -- Executive
summary
Chapter 1 The economics of wind power
Wind power is capital intensive with most of the investment
required upfront. The largest capital cost component is the turbine
itself which can account for between 40% and 80% of the total
capital cost of an onshore wind installation. Costs offshore are
higher because of the more expensive operating environment and the
greater difficulty establishing a foundation so the proportion of
capital cost taken by the turbine is generally lower than onshore.
Turbine cost fell from 1980 until 2002 when prices started to rise
again, peaking in 2009 before falling further. Technological
advances and greater overall efficiency are continuing to bring
costs down. This is feeding into capital cost trends which are
following turbine prices by falling. There are regional variations
in capital costs, with costs lower in India and China than in Europe or the USA but regional differences are narrowing as
the market becomes more global. With capital cost the dominant
component of the cost of energy, the levelized cost of electricity
from wind plants is falling too and onshore wind is beginning to
compete with other technologies, particularly new coal. There is a
growing consensus that onshore wind will reach parity in many parts
of the world by the end of the decade, if not before. Offshore wind
will take longer but could be competing with the main conventional
sources of power by the middle or end of the third decade of the
century.
Chapter 2 Future market and economic prospects for wind power
generation
The cost of wind power has continued to fall compared to many other
technologies over the past five years and is now approaching the
level at which it can compete with conventional technologies. Power
from natural gas and coal remains cheaper (without carbon capture
and storage) but the steady growth in renewable penetration from
both wind and solar power is leading to coal and gas-fired plants
operating for less of the time, a factor which adversely affects
their economics. On the other hand the low cost of wind power is
leading governments to reduce subsidies to wind. By the end of the
decade wind power could be the second cheapest source of
electricity after natural gas in many markets. Growth of wind power
is expected to continue strongly in the major markets of
Europe, Asia and North
America. Markets in Latin
America are
advancing more slowly and wind power in Africa remains a rarity
Key questions answered by this report
What is wind power generation going to cost?
Which wind power generation technology types will be the winners
and which the losers in terms of power generated, cost and
viability?
Which wind power generation types are likely to find favour with
manufacturers moving forward?
Why buy it
To utilise in-depth assessment and analysis of the current and
future technological and market state of wind power, carried out by
an industry expert with 30 years in the power generation
industry.
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