The National Renewable Energy Laboratory in in Golden, Co., has released a report by IEA Wind (Task 26) that details historical trends in the cost of wind energy, while also summarizing future costs. Contributors to the report, “The Past and Future Cost of Wind Energy,” include staff at NREL and LBNL, as well as European participants.
The report can be found here: http://www.nrel.gov/docs/fy12osti/53510.pdf.
For information on IEA Wind and its “Cost of Wind Energy” task, see: http://www.ieawind.org.
Over the past 30 years, windpower has become a mainstream source of electricity generation. However, the future of windpower will depend a great deal on the ability of the industry to continue to achieve cost-of-energy reductions, NREL says.
Key report findings include:
- Between 1980 and the early 2000s, significant reductions in capital cost and increases in performance had the combined effect of dramatically reducing the levelized cost of energy (LCOE) for onshore wind energy.
- Beginning in about 2003 and continuing through the latter half of the past decade, windpower capital costs increased—driven by rising commodity and raw materials prices, increased labor costs, improved manufacturer profitability, and turbine upscaling— pushing wind’s LCOE upward in spite of continued performance improvements.
- More recently, turbine prices have declined, but still have not returned to the historical lows observed earlier in the 2000s. At the same time, performance improvements have continued. As a result, modeling based on capital cost and performance assumptions from the United States and Denmark for projects expected to be built in 2012–2013 suggests that the LCOE of onshore wind energy is now at an all-time low within fixed wind resource classes, and particularly in low and medium wind speed areas.
- Recent capital cost and performance trends have underscored the need for a view of the cost of wind energy that equally weighs trends in capital cost and performance, particularly when trying to understand future costs. The technology is now at a point where an optimal cost of onshore wind energy may result from little or no further capital cost reductions, but continued performance improvements (or, alternatively, from continued cost reductions and more-limited or no performance improvements).
- 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 upscaling 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.
- Estimates of the future cost of onshore wind energy have often been the result of an iterative process that incorporates some combination of historical trends, learning curve analysis, expert elicitation, and engineering modeling. A summary of available studies shows a wide range of estimates, with a 0 to 40% reduction in LCOE expected through 2030 depending on the scenario. By focusing on the results that fall between the 20th and 80th percentiles of scenarios, the range is narrowed to roughly a 20 to 30% reduction in LCOE.
- Further improving our understanding of possible future cost trends will require additional data gathering and improved modeling capability.
National Renewable Energy Laboratory
Filed Under: Financing, News
Jim Leyshon says
Hi Steven, if you shoot me an email I will send you a copy of our new NREL logo to post with this article. Thanks!