Here from the Energy Collective, a more “realistic” view of the costs of developing power from wind.
A More Realistic Cost of Wind Energy
Posted November 29, 2013
, Energy and Economy
, Politics & Legislation
, cost effectiveness
, industry development
, wind energy industry
Various promoters maintain the cost of wind energy is competitive with other sources of energy. As shown below, this is not the case. They often point to power purchase agreements, PPAs, between wind turbine owners and utilities to sell at 5 to 6 c/kWh as proof of market price parity.
However, costs are not the same as prices. Energy costs have to do with the unsubsidized cost of producting energy. Pricing that energy is greatly influenced by the level of subsidies. If that were not the case, wind turbine owners would not be fighting so hard for various subsidies, such as extending the 2.3 c/kWh production tax credit; its pre-tax value is about 3.4 c/kWh, depending on tax rates. This credit is not trivial, as the US average grid price is about 5 c/kWh.
The EIA calculates the levelized cost of NEW onshore wind turbine plants place in service in 2018, capacity factor 0.34, 30-yr life, at $86.6/MWh, including transmission of $3.2/MWh. These costs include various subsidies not available, or partially available, to other sources of energy. As a result, comparison with other energy sources becomes partially invalid.
NOTE: CFs of 0.34, and greater, are obtainable only in windy areas, such as west of Chicago, and offshore. Elsewhere, CFs are significantly less, based on published wind turbine production data from various areas in the world. See URL.
Assuming a realistic 20-year life of a wind turbine increases the levelized cost to $93/MWh.
After backing out the effect of accelerated depreciation for wind turbine plants, the levelized cost increases to $101/MWh.
Adding the cost of increased frequency of start/stop operation, AND keeping gas and coal plants available in cold standby or synchronous standby mode (in case of too little wind to turn the rotors, i.e., about 7.5 mph), AND operating more hours in inefficient, part-load-ramping mode (extra Btu/kWh, extra CO2/kWh) to balance the variable wind energy, is $17/MWh for natural gas, $55/MWh for coal.
Extra balancing NG adds $6.00/MWh, extra balancing coal adds $9.00/MWh
Transmission system investments to get wind energy to the grid adds $27/MWh.
Thus, the total levelized cost of wind energy averages $151/MWh with NG back-up/balancing and $192/MWh with coal back-up/balancing.
Read the full posting here