The World's #1 Renewable Energy Network for News, Information, and Companies.
Untitled Document

Wind Electricity To Be Fully Competitive With Natural Gas by 2016, Says Bloomberg New Energy Finance

The best wind farms in the world are already competitive with coal, gas and nuclear plants. But over the next five years, continued performance improvements and cost reductions will bring the average onshore wind plant in line with cheap natural gas, even without a price on carbon, according analysis from Bloomberg New Energy Finance.

After analyzing the cost curve for wind projects since the mind-1980′s, BNEF researchers showed that the cost of wind-generated electricity has fallen 14% for every doubling of installation capacity. These cost reductions are due to a number of factors: more sophisticated manufacturing, better materials, larger turbines, and more experience with plant operations and maintenance. Those improvements, combined with an oversupply of turbines on the global market, will bring the average cost of wind electricity down another 12% by 2016.

These two changes will drive the cost of wind energy down further, to parity with conventional energy sources. Assuming specific learning rates for these components, we expect wind to become fully competitive with energy produced from combined-cycle gas turbines by 2016 in most regions offering fair wind conditions. That would be the case with wind turbine prices at EUR 0.80m/MW by then. Any increase in the cost of gas, which will consequently raise the cost of energy of gas-fired turbines, would bring forward the timing of grid parity for wind.

The wind industry has a conflicted relationship with natural gas. As a “dancing partner” for wind projects, natural gas can offer firm back-up when the wind isn’t blowing. However, the boom in shale gas extraction has dropped natural gas prices substantially, nudging out wind developers in large markets like Texas.

But the industry is still moving on an experience curve that is bringing the wind farms at cost parity with historically low natural gas prices — even without a price on carbon:

Justin Wu, lead wind analyst at Bloomberg New Energy Finance, said: “The public perception of wind power tends to be that it is environmentally-friendly, but expensive and intermittent. That is out-of-date — in the best locations, where generation is already cost-competitive with fossil fuel electricity, and that will be the case for the majority of new onshore turbines installed worldwide by 2016.

The Bloomberg Analysis again proves the importance of a deployment-based strategy in scaling renewable energy. It often takes decades to bring an energy technology to cost-parity with incumbents. While strong R&D programs are an important piece of improving technologies and encouraging breakthroughs, nothing can match experience gained in the field, explains BNEF researcher Justin Wu:

“The press is reacting to the recent price drops in solar equipment as though they are the result of temporary oversupply or of a trade war. This masks what is really going on: a long-term, consistent drop in clean energy technology costs, resulting from decades of hard work by tens of thousands of researchers, engineers, technicians and people in operations and procurement. And it is not going to stop: In the next few years the mainstream world is going to wake up to wind cheaper than gas, and rooftop solar power cheaper than daytime electricity. Add in the same sort of deep long-term price drops for power storage, demand management, LED lighting and so on – and we are clearly talking about a whole new game,” Wu added.

Those cost reductions don’t just come magically from the lab. It takes a strong deployment strategy to realize them. In 1984, there were only 300 MW of installed wind projects around the world. But by the end of this year, there will be over 240,000 MW.

This article was originally published by Climate Progress and was reprinted with permission.

Untitled Document

RELATED ARTICLES

Wind Power is Breaking Down International Border Barriers

Vince Font In an important “model of collaboration” between the U.S. and Mexico, the first ever cross-border wind farm has been ...

Why Do Germany’s Electricity Prices Keep Falling?

Rachel Morison, Bloomberg Chancellor Angela Merkel cemented Germany’s shift toward an economy powered by renewable energy in 2010 with her “Ene...

German Renewables Investors To Fund Iranian Wind Farm

Anna Hirtenstein, Bloomberg Development Environment Arvand Co., a German-Iranian renewables developer, signed an agreement to build a 48-megawatt...
Top 10 Clean Energy Trends Driving the Global Clean Energy Revolution

Top 10 Clean Energy Trends Driving the Global Clean Energy Revolution

PRESS RELEASES

Array Technologies’ DuraTrack HZ v3 Continues to (R)evolutionize at SPI

Array Technologies, Inc. (ATI) prepares to showcase its recently launched tracking syst...

Appalachian's Energy Center assists counties with landfill gas to energy projects

The Appalachian Energy Center at Appalachian State University recently completed a proj...

Early Bird Registration Deadline for GRC Annual Meeting is This Week

The deadline for early-bird rates for registration for the biggest annual geothermal ev...

Redesigned HydroWorld.com Video Gallery

Hydropower news and information, and interesting promotional announcements are now avai...

FEATURED BLOGS

Transitioning to Net-Zero Living

Judith and Jeffrey adore living in Belfast, Maine – a quaint harbor town of Belfast, Maine. They previously res...

The True Cost of Electric Vehicles in Australia

In order to avoid increased congestion, further greenhouse warming and lessen Australia’s reliance on imported ...

The Coming Multi-trillion Dollar Energy Investment Drive

In coming years, a multi-trillion dollar low-emission energy investment drive will get underway. Three catalysts wil...

The Perfect Elevator Pitch

The elevator pitch is a concise statement that grabs attention and communicates value, ideally leading to a next step...

FINANCIAL NEWS

I am a reporter with ClimateProgress.org, a blog published by the Center for American Progress. I am former editor and producer for RenewableEnergyWorld.com, where I contributed stories and hosted the Inside Renewable Energy Podcast. Keep in to...

CURRENT MAGAZINE ISSUE

Volume 18, Issue 4
1507REW_C11

STAY CONNECTED

To register for our free
e-Newsletters, subscribe today:

SOCIAL ACTIVITY

Tweet the Editors! @jennrunyon

FEATURED PARTNERS



EVENTS

Doing Business in Europe – in partnership with GWEC, the Global Win...

There is now 128.8 GW of installed wind energy capacity in the EU (appro...

Doing Business in South Africa – in partnership with GWEC, the Glob...

Wind Energy in South Africa has been expanding dramatically, growing fro...

Distributed Wind Energy Workshop

Description: Distributed wind energy is electricity that is produced for...

COMPANY BLOGS

Clean Energy Patents Maintain High Levels in First Quarter, Solar L...

U.S. patents for Clean Energy technologies from the first quarter of 201...

Koch Professor drops his Koch title, still makes same errors plus s...

The Koch Professor’s title isn’t the only thing that’s...

Fact Check: AWEA represents American wind power

The American Wind Energy Association (AWEA) is proud of its members for ...

NEWSLETTERS

Renewable Energy: Subscribe Now

Solar Energy: Subscribe Now

Wind Energy: Subscribe Now

Geothermal Energy: Subscribe Now

Bioenergy: Subscribe Now  

 

FEATURED PARTNERS