The research shows that wind energy technology was far from static over the study period, and estimates that the levelized cost of wind energy is now trending towards an all-time low within fixed wind resource areas.

Briefing materials are available to summarize a recent analysis of onshore wind energy cost trends. The analysis was conducted jointly by the Lawrence Berkeley National Laboratory (LBNL) and the National Renewable Energy Laboratory (NREL), titled: “Recent Developments in the Levelized Cost of Energy from us Wind Power Projects.”

The briefing presentation summarizing the work is at: http://eetd.lbl.gov/ea/ems/reports/wind-energy-costs-2-2012.pdf. (Side note – portions of this work were also presented in a multi-part webinar in December 2011, with audio and video is available at: http://www.windpoweringamerica.gov/filter_detail.asp?itemid=3337).

The LBNL-NREL work analyzes wind energy costs in three time periods: projects installed 2002 to 2003, projects installed 2009 to 2010, and projects based on current wind turbine pricing and to be installed in ~2012-2013. The research shows that wind energy technology was far from static over this period, and estimates that the levelized cost of wind energy is now trending towards an all-time low within fixed wind resource areas. Key findings include:

• When only accounting for capital cost and capacity-factor trends, the levelized cost of wind energy based on current turbine pricing is estimated at 5 to 26% below the previous low in 2002-2003, depending on the quality of the wind resource. When also considering plausible assumptions for O&M, financing, and turbine reliability trends, levelized cost reductions are estimated at 24 to 39% since 2002-2003.
• These trends have been driven primarily by sizable improvements in capacity factors within individual wind resource classes due to hub height and rotor diameter scaling, and by the drop in wind turbine prices over the last 2 years. Longer-term improvements in O&M, reliability, and financing are also playing a role, though trends in these factors are less certain. Technology advancement and learning clearly still apply to onshore wind-energy technology.
• The levelized cost of wind energy increased significantly between 2002-2003 and 2009-2010 due to turbine price and project cost increases that were not fully offset by performance improvements. Turbine prices have since declined, while performance improvements have continued, yielding a substantial predicted decline in the levelized cost of wind energy.
• The levelized cost of wind energy in the best wind resource sites is approaching about $0.03/kWh (with available federal tax incentives). Due to improvements in low wind-speed technology, the gap between the cost of wind energy in low and high wind speed areas has narrowed considerably, opening new areas of the United States for potential development.
• The amount of land area in the United States that can support 35%+ project-level capacity factors has increased by 130 to 270% since 2002-2003 due to improvements in turbine technology. The amount of land area that can support wind projects with costs of under $0.05/kWh (with federal tax incentives) has increased by almost 50% over the same time period.
• Despite recent advancements, at least three factors may intervene to raise the levelized cost of wind energy for purchasers:
• The potential for increased pricing if demand for wind turbines begins to catch up with available supply, or if other exogenous influences are triggered (e.g., higher commodities and/or labor costs)
• The potential continued trend towards lower wind speed sites as a result of transmission and siting restrictions, and
• The potential loss of federal tax incentives for wind energy after 2012, which currently reduce the cost of wind energy for purchasers by nearly  $0.03/kWh.

LBNL
RHWiser@lbl.gov

National Renewable Energy Laboratory
eric.lantz@nrel.gov