Berkeley Lab Authors Shed Light on U.S. Wind Power Market

With 2,454 megawatts (MW) of wind capacity added in 2006, the U.S. is the fastest growing wind market worldwide. But there still remains substantial room for expansion, as wind power currently generates less than one percent of total U.S. electricity consumption.

That is but one of the findings in a new report from The U.S. Department of Energy’s Wind and Hydropower Technologies Program, which recently released “U.S. Wind Power Installation, Cost, and Performance Trends: 2006.” With a particular focus on the trends in 2006, it is hoped that this report fills the need for timely, objective information on the industry and its progress.

“Much of the information presented in the report reflects a maturing U.S. wind power industry on solid footing, yet also grappling with the implications of unprecedented growth,” notes co-author Mark Bolinger, who with Ryan Wiser, also with Lawrence Berkeley National Laboratory (LBNL), cites other key findings:

• Wind power has provided good value in wholesale power markets in recent years, and has generally been priced at or below the cost of conventional fossil generation.
• The cost of turbines has risen since 2002, reversing the decline in total wind project costs and driving up the cost of generating wind power. The full effect of this cost increase will continue to play out in coming years as recent turbine cost increases flow through to wind power prices.
• Wind project performance has increased over the last several years, driven in part by higher tower heights, improved project siting, and technological advancements.
• The wind market is in a period of transition, as electric utilities have shown increased interest in wind project ownership, and merchant wind power plants and sales to power marketers have become more common.

A Note on Scope

The report concentrates on larger-scale wind applications, defined here as individual turbines or projects that exceed 50 kW in size. The U.S. wind power sector is multifaceted, and also includes smaller, customer-sited wind applications used to power the needs of residences, farms, and businesses. Data on these applications, if they are less than 50 kW in size, are not included.

Much of the data included in the report was compiled by Berkeley Lab in multiple databases that contain historical information on wind power purchase prices, capital costs, turbine transaction prices, project performance, and O&M costs for many of the wind projects in the United States.

The information included in these databases comes from a variety of sources, and in many cases represents only a sample of actual wind projects installed in the U.S. As such, the report cautions that the data are not always comprehensive or of equal quality, so emphasis should be placed on overall trends in the data, rather than individual data-points. Finally, each section of this document focuses on historical market data or information, with an emphasis on 2006; the report does not seek to forecast future trends.

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