Environmental Engineering Reference
In-Depth Information
Cost of Energy
At irst, the cost of wind-generated electricity, COE, dropped dramatically after 1980,
when the irst commercial wind plants began operation in California. However, after 2003
costs of energy began to increase. Table 3-5 lists cost data taken from public records for
some more recent wind energy projects. These igures represent the price of electricity as
sold by a wind-plant operator to the host utility. The price includes the beneit of the federal
production tax credit, any state incentives, and revenue from the sale of any renewable en-
ergy or green energy credits. Thus, the true cost of the delivered electricity would be higher
than the costs in Table 3-5 by approximately 2 cents per kWh, which is the value of the
federal tax credit.
Table 3-5. Evolution of Capacity Factors for Wind Power Plants
[Wiser and Bolinger 2008]
Years
No. of Wind
Power Plants
Total Rated
Power
(MW)
Capacity Factor
Weighted Average
Range
Pre-1998
20
936
22%
12% - 29%
1998-99
21
892
30%
16% - 37%
2000-01
26
1,743
30%
8% - 36%
2002-03
25
1,911
34%
21% - 41%
2004-05
26
2,669
35%
20% - 44%
2006
17
2,225
33%
28% - 46%
Table 3-6. Evolution of Sales Cost of Energy for Wind Turbine Projects
[Wiser and Bollinger 2008]
Years
No. of Projects
Total Rated Power
(MW)
Cost of Energy
(¢/kWh)
Weighted Average
Range
1998-99
14
624
3.8
2.6 - 5.6
2000-01
16
860
3.5
2.2 - 6.1
2002-03
24
1,781
3.1
2.1 - 5.6
2004-05
21
1,681
3.7
2.4 - 6.8
2006
10
732
4.9
3.0 - 6.5
2007
20
2,412
4.5
3.5 - 6.8
As can be seen from the cost data in Table 3-6, prices for wind-generated electricity
increased signiicantly in 2006 and 2007. In 2007, the price paid for electricity generated
in large wind power plants was between 3.5 and 6.8 cents per kilowatt-hour (kWh) with an
average near 4.5 cents per kWh. Accounting for the tax credit then indicates that the unsub-
sidized cost for wind-generated electricity for projects completed in 2007 ranges from about
5.5 to 8.8 cents per kWh.
The reasons generally offered for recent increases in the price of wind-generated elec-
tricity after the long downward price trend of the past 25 years include the following:
Weakening of the U.S. dollar relative to the euro, because many major turbine
components are imported from Europe. There are relatively few wind turbine
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