comparative price of wind energy

As early as the 1990’s, Pacific Gas & Electric (the California utility) concluded that wind would ultimately become America’s least expensive source of energy. In 2002, the Department of Energy’s National Renewable Energy Laboratory (NREL) graphed the historical cost-trends of wind energy.

The NREL’s projection in 2002 accurately forecast that today in 2009, the cost of energy produced from wind turbines is competitive with mainstream power technologies, such as natural gas (Combined Cycle Gas Turbine or CCGT), nuclear and even coal-fired generation (Integrated Gasification Combined Cycle or IGCC).

The mix of America’s energy production is approximately as follows; coal (51 percent), natural gas (18 percent) and nuclear (20 percent). However, most new electric energy plants constructed since the mid 1990’s are natural gas fired (CCGT). But, the cost of natural gas has increased steadily since that time, when it averaged less than $2 per thousand cubic feet, to today’s cost of approximately $6 per thousand cubic feet.  The result is that the cost of natural gas fired electric energy generation can be unpredictable. For example, in January 2003, when natural gas costs reached $15 per thousand cubic feet in some markets, the cost of natural gas generated power reached as 20 cents per kWh in peak hours, in those same markets.

While wind energy cannot entirely replace base-load generation (from natural gas, coal, nuclear, hydro), in contrast to natural gas, the cost of wind energy has continued to decline. In fact, the cost of wind energy has dropped by approximately 15% with each doubling of installed capacity worldwide, and capacity doubled three times during the 1990s. Wind energy today costs only about one-sixth as it did in the 1980’s and its cost is expected to further decline by another 25% by 2010.

It's not surprising that wind energy is the fastest growing source of power generation in America and the world given the direct economic benefits. But, if indirect environmental costs were factored in, wind energy's competitiveness would increase even further because of its low environmental impact. Wind energy produces no emissions, but less obviously, wind energy is also free of the additional environmental costs resulting from mining or drilling, processing and shipping other “fuels”. In contrast, coal, which provides half of America’s electric energy as mentioned above, has been linked to illness, acid rain and mercury pollution, and releases greenhouse gases and therefore may contribute to global warming. Although natural gas is less polluting than coal, it also releases greenhouse gases that also may affect our world’s climate. The use of wind energy does not pollute our air or water and, unlike nuclear power, requires no hazardous waste storage. Finally, an increasingly important economic and strategic benefit of wind energy is its contribution in reducing our dependence upon of imported energy from less secure regions across the globe.