As new technologies go, wind has enjoyed three decades of continuous innovation, performance and reliability improvements and falling costs – benefits of economies of scale, technological advancements and learning by doing. The law of diminishing marginal returns, however, appears to have gotten in the way of further cost reductions.
That appears to be the underlying message from a new report, The Past and Future Cost of Wind Energy with contributions of experts at the National Renewable Energy Laboratory (NREL), the Lawrence Berkeley National Laboratory (LBNL) and a number of European collaborators.
In a prepared statement circulated on June 6, 2012, Ryan Wiser, one of the lead authors of the study and a researcher at LBNL put it this way: “Over the past 30 years, wind power has become a mainstream source of electricity generation. However, the future of wind power will depend a great deal on the ability of the industry to continue to achieve cost of energy reductions.”
What is behind the – albeit modest – rising costs? “Beginning in about 2003 and continuing through the latter half of the past decade, wind power capital costs increased – driven by rising commodity and raw materials prices, increased labor costs, improved manufacturer profitability, and turbine up-scaling – thus pushing wind’s levelized cost of electricity (LCOE) upward in spite of continued performance improvements,” according to the report.
Capacity factor, roughly what percentage of time wind generates power, a key determinant of performance, appears to have flattened out in Spain around 25%, while the US appears to enjoy higher rates. One has to read the fine print for such nuances, but it is an acceptable fact that wind does not blow uniformly and a capacity factor above 25% is probably as good as one can expect.
What about the future? “The LCOE of wind energy is expected to continue to fall, at least on a global basis and within fixed wind resource classes. Performance improvements associated with continued turbine up-scaling and design advancements are anticipated, and lower capital costs may also be achievable. The anticipated magnitude of LCOE reductions varies widely and will ultimately be determined by an array of technical and non-technical variables,” according to the report.
Wiser’s own prognosis is that, “Further improving our understanding of possible future cost trends will require additional data gathering and improved modeling capability.”
Perry Sioshansi is the editor of EEnergy Informer, and a consultant for energy firms. He can be reached at fpsioshansi@aol.com.
A recent book, Smart Grid: Integrating Renewable, Distributed, and Efficient Energy, edited by Sioshansi, explores the many dimensions of the smart grid . With contributions from a number of prominent experts, scholars and practitioners with different perspectives, the book provides a broad coverage of the what, how, when, why and other facets of the smart grid.
