What are the factors in the cost of electricity from wind turbines?


The cost of electricity from utility-scale wind systems has dropped by more than 80 percent in the last 20 years.

In the early 1980s, when the first utility-scale wind turbines were installed, wind-generated electricity cost as much as 30 cents per kilowatt-hour. Now, state-of-the-art wind power plants at excellent sites generate electricity at less than 5 cents per kilowatt-hour. Costs are continuing to decline as more, larger plants are built and advanced technology is introduced.

Aside from actual cost, wind energy offers the following additional economic benefits, which make it even more competitive in the long term:

  • Greater fuel diversity and less dependence on fossil fuels, which are often subject to rapid price fluctuations and supply problems. This is a significant issue around the world today, with many countries rushing to install gas-fired electric generating capacity because of its low capital cost. As world gas demand increases, the prospect of supply interruptions and fluctuations will grow, making further reliance on it unwise and increasing the value of diversity.
  • Greatly reduced environmental impacts per unit of energy produced, compared with conventional power plants. Environmental costs are becoming an increasingly important factor in utility resource planning decisions.
  • Long-term income to ranchers and farmers who own the land on which wind farms are built.
Selection of a suitable site is key to the economics of wind energy. The power available from the wind is a function of the CUBE of the wind speed, which means, all other things being equal, a turbine at a site with 5-meters-per-second (m/s) (11 mph) winds will produce nearly twice as much power as a turbine at a location where the wind averages 4 m/s (9 mph). In the electric power business, where technology options often hinge on very small economic differences, good wind resource assessment and siting is critical.

In general, winds exceeding 5 m/s (11 mph) are required for cost-effective application of small grid-connected wind machines, while wind farms require wind speeds of 6 m/s (13 mph). For applications that are not grid-connected, of course, these requirements may vary, depending on the other power alternatives available and their costs.