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The Future Cost of Wind Power

Executive summary

Chapter 1 The economics of wind power


Wind power is capital intensive with most of the investment required upfront. The largest capital cost component is the turbine itself which can account for between 40% and 80% of the total capital cost of an onshore wind installation. Costs offshore are higher because of the more expensive operating environment and the greater difficulty establishing a foundation so the proportion of capital cost taken by the turbine is generally lower than onshore. Turbine cost fell from 1980 until 2002 when prices started to rise again, peaking in 2009 before falling further. Technological advances and greater overall efficiency are continuing to bring costs down. This is feeding into capital cost trends which are following turbine prices by falling. There are regional variations in capital costs, with costs lower in India and China than in Europe or the USA but regional differences are narrowing as the market becomes more global. With capital cost the dominant component of the cost of energy, the levelized cost of electricity from wind plants is falling too and onshore wind is beginning to compete with other technologies, particularly new coal. There is a growing consensus that onshore wind will reach parity in many parts of the world by the end of the decade, if not before. Offshore wind will take longer but could be competing with the main conventional sources of power by the middle or end of the third decade of the century.

Chapter 2 Future market and economic prospects for wind power generation

The cost of wind power has continued to fall compared to many other technologies over the past five years and is now approaching the level at which it can compete with conventional technologies. Power from natural gas and coal remains cheaper (without carbon capture and storage) but the steady growth in renewable penetration from both wind and wind power is leading to coal and gas-fired plants operating for less of the time, a factor which adversely affects their economics. On the other hand the low cost of wind power is leading governments to reduce subsidies to wind. By the end of the decade wind power could be the second cheapest source of electricity after natural gas in many markets. Growth of wind power is expected to continue strongly in the major markets of Europe, Asia and North America. Markets in Latin America are advancing more slowly and wind power in Africa remains a rarity.

Key features of this report

  • Analysis of wind power generation technology costs, concepts, drivers and components.
  • Assessment of electricity costs for different technologies in terms of the two fundamental yardsticks used for cost comparison, capital cost and the levelized cost of electricity.
  • Examination of the key wind power generation technologies costs.
Key benefits from reading this report
  • Realize up to date competitive intelligence through a comprehensive power cost analysis in wind power generation markets.
  • Assess wind power generation costs and analysis – including capital costs and levelized costs.
  • Quantify capital and levelized cost trends and how these vary regionally.
Key questions answered by this report

1.What is wind power generation going to cost?
2.Which wind power generation technology types will be the winners and which the losers in terms of power generated, cost and viability?
3.Which wind power generation types are likely to find favour with manufacturers moving forward?

Who this report is for

Power utility strategists, energy analysts, research managers, power sector manufacturers, wind power developers, investors in renewables systems and infrastructure, renewable energy developers, energy/power planning managers, energy/power development managers, governmental organisations, system operators, companies investing in renewable power infrastructure and generation, investment banks, infrastructure developers and investors, intergovernmental lenders, energy security analysts.

Why buy it
  • To utilise in-depth assessment and analysis of the current and future technological and market state of wind power, carried out by an industry expert with 30 years in the power generation industry.
  • Use cutting edge information and data.
  • Use the highest level of research carried out.
  • Utilize expert analysis to say what is happening in the market and what will happen next.
  • Save time and money by having top quality research done for you at a low cost.


Executive summary
Chapter 1 The economics of wind power
Chapter 2 Future market and economic prospects for wind power generation
Chapter 1. The economics of wind power
Summary
Introduction
Wind turbine and capital cost trends
Levelized cost of wind power
Chapter 2. Future market and economic prospects for wind power generation
Summary
Introduction
Cost comparisons
Growth predictions
Regional growth
Europe
Asia
North America
Latin America
Africa
Conclusion
List of abbreviations
Table of tables
Table 1: Breakdown of capital costs for onshore wind installation (%), 2013
Table 2: Wind, onshore and offshore capital cost trends from 2001-2013 ($kW), 2013
Table 3: Levelized cost trends from 2009 – 2014 ($/MWh), 2014
Table 4: Wind, regional capital and levelized costs ($/MWh), 2013
Table 5: Levelized cost variations for wind ($/MWh), 2013
Table 6: Levelized cost comparisons ($/MWh), 2013
Table 7: Levelized cost predictions 2019 and 2040 ($/MWh), 2014
Table 8: Levelized cost of wind power estimates 2013 – 2017 (£/MWh), 2013
Table 9: Onshore and offshore wind, levelized cost predictions 2014 – 2030 (£/MWh), 2013
Table 10: Global wind capacity growth forecasts 2013 – 2018 (MW), 2014
Table 11: Wind energy growth predictions 2010 – 2040 (TWh), 2013
Table 12: Regional wind capacity additions 2013 – 2018 (MW), 2014
Table of figures
Figure 1: Breakdown of capital costs for onshore wind installation (%), 2013
Figure 2: Wind, onshore and offshore capital cost trends from 2001-2013 ($kW), 2013
Figure 3: Levelized cost trends from 2009 – 2014 ($/MWh), 2014
Figure 4: Wind, regional capital costs ($/MWh), 2013
Figure 5: Wind, regional levelized costs ($/MWh), 2013
Figure 6: Levelized cost variations for wind ($/MWh), 2013
Figure 7: Levelized cost comparisons ($/MWh), 2013
Figure 8: Levelized cost predictions 2019 and 2040 ($/MWh), 2014
Figure 9: Levelized cost of wind power estimates 2013 – 2017 (£/MWh), 2013
Figure 10: Onshore and offshore wind, levelized cost predictions 2014 – 2030 (£/MWh), 2013 .. 29
Figure 11: Global wind capacity growth forecasts 2013 – 2018 (MW), 2014
Figure 12: Wind energy growth predictions 2010 – 2040 (TWh), 2013
Figure 13: Regional wind capacity additions 2013 – 2018 (MW), 2014

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