Project Development, Wind Power

Wind Energy to Hit New Low in Cost

Electricity from new wind farms in the western United States will be generated at record-low costs, according to the industry’s lobby group.

WASHINGTON, DC – The cost will drop to a record low of 2.5 cents per kilowatt-hour (kWh) from the 300 MW Stateline wind farm that is being developed along the border of Washington and Oregon, according to the American Wind Energy Association. That cost includes the federal wind energy production tax credit, which can reduce costs by 0.7¢/kWh over the lifetime of a wind plant. “Our nation’s abundant winds can provide a low-cost, clean energy solution to the current energy crisis,” says executive director Randall Swisher. “Wind energy can help power American homes and businesses while providing a buffer against spikes in the price of natural gas and other fuels used to produce electricity in conventional power plants.” Previous low costs were set at large wind farms in Texas, Iowa and Minnesota, where energy is generated at 3¢/kWh. The cost of wind energy remains predictable over the life of the plant, and even the cost of 6 to 8¢/kWh at smaller wind farms in less windy locations compares favorably to natural gas-generated power in certain markets. Bonneville Power Administration, the federal power agency in the Pacific Northwest, says it will purchase 1,000 MW of wind energy and it “wants it fast” to alleviate the regional power shortage. BPA has also signed as one of the purchasers of electricity to be generated from the Stateline Project. In Colorado, the Public Utilities Commission ruled that Xcel should include a proposed wind farm in its plan to meet growing electricity demand. Xcel had rejected a 162 MW wind farm proposal by Enron Wind, but the PUC ruled that, on economic grounds alone, the wind farm would help lower costs to the consumer. A decade ago, the Electric Power Research Institute and Pacific Gas & Electric had predicted that wind ultimately would become the least expensive electricity generation source in the United States. The levelized cost ranges from 3.8 to 6 cents per kWh for conventional combustion turbines (these figures do not reflect the recent spikes in the cost of natural gas) according to the California Energy Commission and the Energy Information Agency. The current levelized cost of wind energy ranges from 3 to 6¢/kWh today (excluding the federal PTC), which AWEA says are competitive with conventional power generation. If environment factors are considered, a single 1 MW turbine displaces 4.65 million pounds (2,317 short tons) of carbon dioxide, 24,000 pounds (12 tons) of sulfur dioxide, and 15,900 pounds (7.95 tons) of nitrogen oxides. “By tapping its vast wind resources, America can boost its electricity supply by 10 to 20 percent without additional air pollution or emissions of global warming gases, and at the same time get affordable insurance against volatile energy prices,” says Swisher. “Some utilities are beginning to do the numbers and realize that wind energy is smart business.”