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Production Tax Credit helps push cost of wind power close to $0.03/kWh

By Paul Dvorak | February 8, 2012

News blows through the blogosphere faster than the wind across Texas. For instance, a significant study from NREL and Lawrence Berkeley National Laboratory regarding the falling-cost trend for wind generated power has already come and gone. Its 15 minutes of fame are up. But more people should know this.

In a nutshell, the study found the levelized cost of wind energy in the best wind-resource sites approaches $0.03/kWh with available federal tax incentives. That’s remarkably low. In Northern Ohio, First Energy charges about $0.122/kWh. The company breaks out its generation cost at $0.0634/kWh, about twice the cost of wind power. The $0.03/kWh is remarkable.

This begs the question: With such efficiency gains, why would anyone not want to keep this development program, called “the wind industry,” going? The study adds that due to improvements in turbines tuned for lower wind speeds, the gap between the cost of wind energy in low and high wind speed areas has narrowed considerably, opening more areas of the United States for potential development.

The low figure was for the best sites, those with highest capacity factors. Still, taller towers, longer blades, and drivetrain improvements are letting newer turbines perform with similar result in areas that have not been considered good wind sites. If you read the news sections of Windpower Engineering & Development, you’ve seen that technical improvements are coming at a steady rate. Turbines will shed pounds, blades will become more efficient, new construction techniques and ideas will take further costs out of foundations and towers.

Don't let the sun set on the PTC. Contact your Representatives and Senators and express your support for the wind industry with an extension to the tax credit.

The trick is to keep this invention machine going. The Production Tax Credit will do just that. It’s a tax credit, not a subsidy, that provides $0.022/kWh. It rewards production. Even wind opponents can understand the tax credit they take on their mortgage, but there it rewards consumption – shame on them.

An OEM rep at a recent conference thinks that in about seven years, the PTC may be allowed to expire for good because improvements and better efficiency will let wind produce the lowest power cost, and the tax credit will no longer be needed. Can other power industries say that?

Paul Dvorak
Editor
Windpower Engineering & Development


Filed Under: News

 

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Paul Dvorak

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