The Cost of Renewable Power: A Survey of Recent Estimates - Green Energy and Efficiency: An Economic Perspective - page 247

emerging markets and the fact is that it is second only to hydro power in the ranking
of shares attributable to renewable technologies with a higher share at the world
level.
The consistent trend towards higher, taller turbines which has continued unin-
terrupted since the initial deployments is also striking. This can be partly explained
by the higher wind speeds at higher altitudes, and by the fact that blade diameter
can thus also increase. Substantial ef ciency improvements can be very achieved,

but turbine costs increase hand in hand with them, so that in the end the LCOE does
not improve signi

cantly. Thus, one possible explanation for the trend is that
increased up-front costs raise a nancial barrier that prevent the entry of smaller

competitors.
The power generator mechanism is well known, but requires careful monitoring
and frequent adjustments, so O&M costs are considerable, though they still amount
to a few USD cents per kWh.: this adds signi

cantly to the LCOE and is a dis-
advantage as compared to other renewable technologies such as PV and hydro [ 23 ].
This is especially so for offshore turbines, where costs can be double those onshore
due to harsh sea conditions. Capital costs are dominated by turbine costs, which are
in the range of 75

85 % as an approximate world average. And turbine costs in turn
are heavily dependent on the prices of raw materials such as steel, copper, and
cement. This makes it dif

-

cult to reduce turbine prices once maturity in their
manufacturing has been achieved, since the nal price depends more on the price of
raw materials than on anything else. And since turbines account for the lion

s share
of the total cost of wind power systems the scope for further decreases in the price
of turbines shrinks rapidly. In offshore systems the share of the total

'

nal cost

accounted for by turbines is smaller (55 65 %), and cost reductions may come from

other components in the system, e.g. connections to shore to deliver the power
generated and connections to the general grid from that point, monitoring devices,
and so on. It is dif

-

cult to envisage signi cant cost reductions in these items,

nevertheless.
Wind farms have recently been deployed on a massive scale in some emerging
economies, notably China and India. In fact, China stands today as the world leader
in installed wind capacity. Turbine manufacturing costs in these countries are
considerably lower than in advanced OECD economies, due to cheaper local labour
and other conditions. Since the cult to transport

over long distances, market competition is unlikely to force costs to converge to the
lowest possible values observed in these countries.
The history of costs reveals that they followed a continued decreasing trend from
the beginning of signi

nal turbines themselves are dif

2004. Since then, that trend has
ceased to exist, and prices even rose for a time before recently showing modests
decreases again [ 40 ]. This is generally believed to be a sign that maturity in the
manufacturing process has been achieved, and that the price increases observed
were due to the increase in the price of raw material inputs, i.e. steel, copper and
cement. Since that increase was probably due to the high growth rates of emerging
economies, the current slowing in that growth rate may explain the decrease in the

cant deployment up to 2000 -