Wednesday, November 16, 2011

Wind Turbines Cost Less & Produce More, Making Wind Power Highly Competitive

The heart of the wind power revolution globally and in the USA is much better wind machines. Today wind turbines cost much less and produce much more. The cost and production trends for wind power are startling good, as reported by Bloomberg New Energy Finance.

In real terms, the cost of wind turbines has declined from $2.74 million per megawatt in 1984 to $1.2 million in 2011.  Operating costs have declined from a very high $68 per megawatt-hour (6.8 cents per kilowatt-hour) to $15 per megawatt-hour, as reported by Bloomberg.

Cheaper machines are producing more.  Capacity factors have risen from 21% to 34% from 1984 to 2011. One megawatt of wind capacity produced 1800 megawatt-hours in 1984.  Today one megawatt produces 2900 megawatt-hours.

The combination of declining costs and increasing production has made wind power a competitive, attractive source of electricity.  Its cost are almost fixed for 25 years, since the fuel is free.  Wind power has zero carbon, soot, smog, toxic pollution.  It consumes and discharges no water.  All are big advantages now that will get bigger over the next 10 years when water limits become more severe in many places and when the need to cut carbon pollution is accepted across the globe.

Even without important environmental and health external costs included in energy pricing, the modern machines can produce electricity competitively, even with gas turbines, when they are located in strong wind areas or when gas is priced at $5 to $6 per thousand cubic feet.  In Asia and Europe gas is priced up to $16 per thousand cubic feet.

The best wind machines are ahead.  Innovation continues. That means the best days for wind power are also ahead.

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