15 February 2011

Why Wind Is the New Coal

by Gina Marie Cheeseman

The cost of onshore wind power dramatically decreased, and in some regions is competitive with coal, according to a survey by Bloomberg New Energy Finance (BNEF). The survey is based on wind turbine contracts provided by 28 consumers in 28 global markets, which represent almost 7,000 megawatts (MW) of turbines. The contracts signed late last year for turbines delivered in the first half of this year decreased seven percent from 2009 to an average of $1.33 million a MW, a 19 percent decrease since 2007.

In some areas of the U.S., Brazil, Mexico and Sweden, the cost of wind power ($68 per megawatt hour) generated electricity is competitive with coal-fired power (($67 a megawatt hour, according to the BNEF survey.

"The latest edition of our Wind Turbine Price Index shows wind continuing to become a competitive source of large-scale power," Michael Liebreich, Bloomberg New Energy Finance's chief executive, said in a statement.

Turbine costs up, wind costs down

"For the past few years, wind turbine costs went up due to rising demand around the world and the increasing price of steel," he added. "Behind the scenes, wind manufacturers were reducing their costs, and now we are seeing just how cheap wind energy can be when overcapacity in the supply chain works its way through to developers."

There’s more good news about wind power. It is now cost-competitive with natural gas for new electric generation, according to a recent statement by the American Wind Energy Association (AWEA).

"Wind power is a great deal right now in many areas of the country," said Denise Bode, CEO of the American Wind Energy Association (AWEA).

“If you’re going to build a new wind farm, it is going to be competitive with any other new form of generation,” says Elizabeth Salerno, AWEA’s director of industry data and analysis.

Once again, US is behind

When it comes to offshore wind power, the bad news is that the U.S. lags behind Europe, Japan and China. However, the National Offshore Wind Strategy Plan, a Joint DOE and Interior Department research program, may help to change that fact. The research program is now $50.5 million. The grant money will go to wind turbine hardware and software technology development ($25 million), next-generation drive-trains ($7.5 million), and research into removing market barriers for offshore wind (up to $18 million over 3 years).

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