Renewables on the rise around the world
FRISCO — A new report from the U.S. Department of Energy shows that wind energy prices have fallen to an all-time low, with prices offered by wind projects to utility purchasers averaged under $0.2.5 per/kWh. The falling prices have spurred increased demand by utilities, according to the report, with wind power comprising 33 percent of all new U.S. electric capacity additions since 2007
“Wind energy prices, particularly in the central United States, have hit new lows, with utilities selecting wind as the low cost option,” Berkeley Lab senior scientist Ryan Wiser said. “Moreover, enabled by technology advancements, wind projects are economically viable in a growing number of locations throughout the U.S.”
Wind power currently meets almost 5 percent of the nation’s electricity demand, and represents more than 12 percent of total electricity generation in nine states, and more than 20 percent in three states.
Key findings from the U.S. Department of Energy’s latest “Wind Technologies Market Report” include:
- Turbine scaling is enhancing wind project performance. Since 1998-99, the average nameplate capacity of wind turbines installed in the United States has increased by 172 percent (to 1.9 MW in 2014), the average turbine hub height has increased by 48 percent (to 83 meters), and the average rotor diameter has increased by 108 percent (to 99 meters). This substantial scaling has enabled wind project developers to economically build projects in lower wind-speed sites, and is driving capacity factors higher for projects located in various wind resource regimes. Moreover, turbines originally designed for lower wind speeds are now regularly deployed in higher wind speed sites, further boosting project performance.
- Low wind turbine pricing continues to push down installed project costs. Wind turbine prices have fallen 20 percent to 40 percent from their highs back in 2008, and these declines are pushing project-level costs down. Wind projects built in 2014 had an average installed cost of $1,710/kW, down almost $600/kW from the peak in 2009 and 2010.
- The continued decline in average wind prices, along with a bit of a rebound in wholesale power prices, put wind below the bottom of the range of nationwide wholesale power prices in 2014. Wind energy contracts executed in 2014 also compare very favorably to a range of projections of the fuel costs of gas-fired generation extending out through 2040. These low prices have spurred demand for wind energy, both from traditional electric utilities and also, increasingly, from commercial customers.
- The manufacturing supply chain continued to adjust to swings in domestic demand for wind equipment. Wind sector employment increased from 50,500 in 2013 to 73,000 in 2014. Moreover, the profitability of turbine suppliers has generally rebounded over the last two years, after a number of years in decline.
- Despite the significant growth in the domestic supply chain over the last decade, however, far more domestic manufacturing facilities closed in 2014 than opened. With an uncertain domestic market after 2016, some manufacturers have been hesitant to commit additional long-term resources to the U.S. market.
Berkeley Lab’s contributions to this report were funded by the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy.