Wind power cheaper than conventional sources, find plethora of studies

A Swiss technology institute has found that wind power is already cheaper than conventional electricity sources in in Brazil, Egypt, India, Kenya, Nicaragua and Thailand. The study was published a month after a US report by the Michigan Public Service Commission to the state legislature found that electricity from wind energy and other renewables is close to one-third cheaper than electricity from a new coal-fired plant.
Wind power cheaper than conventional sources, find plethora of studies

Research scientists from ETH-Zurich’s Department of Management, Technology and Economics have published a study on the true cost of wind power in the monthly journal Nature Climate Change. The study is linked to an agreement made at the 2010 climate change conference in Cancun in which nations agreed to channel money into southern countries in order to lessen the impact of climate change. The study looked into the best ways to spend money on protecting the climate.

“Our results unveil large cost variations across specific technology-country combinations and show to what extent fossil-fuel subsidies can negatively affect the competitiveness of renewable-energy technologies,” highlights the authors of the study.

Writing about the study in the newsletter ETH Life, Fabio Bergamin said many developing countries should turn to wind power plants because of the lower costs. Bergamin also said the ETH scientists compared what it would cost to generate a tenth of the electricity demand with wind power or photovoltaics for the six countries.

“The result,” he said, “with one franc or dollar of funding, you can produce more electricity in all the countries examined – Brazil, Egypt, India, Kenya, Nicaragua and Thailand – if the money is invested in wind power plants.”

He said the researchers also compared their calculations for wind and solar power in the individual countries with the present electricity mix and found, in Kenya and Nicaragua, that producing electricity with wind power plants would even be cheaper than it is now:

“As the study reveals, not only would a green switch make sense there for climate reasons, but also purely economic ones,” Bergamin said.

Renewable power “one-third cheaper”

The study comes a month after the publication of a US report by the Michigan Public Service Commission which found that wind power and electricity from other renewables is close to one-third cheaper than electricity from a new coal-fired plant.

The report found that average costs over the life cycle of renewable energy systems equalled €69.5 per megawatt-hour (MWh) while the cost for a new coal fired power plant totalled €101 per MWh.

The report caught the approving attention of the American Wind Energy Association (AWEA) which noted that “fossil-fuel-funded ‘experts’ often exaggerate the cost of electricity generated with wind power”.

AWEA published excerpts of the report, including this statement: “the actual cost of renewable energy contracts submitted to the Commission to date shows a downward pricing trend. This was the case as of the filing of this report in February of 2011 and continues to be the case, as the two most recent contracts approved by the Commission for new wind capacity have levelised [i.e the average cost of electricity over the lifetime of the plant] costs of $61-64 [€46-48.7] per MWh. This is significantly lower than the levelised costs of the first wind contracts submitted in 2009.”

In addition, the Court of Auditors in France published a report in March 2012 that revealed the cost of producing nuclear energy is set to surge in France as old plants need updating and new safety standards put in place. Nuclear will require significant investment in the short and medium term at a rate of at least double the current level of investment, the Court said.

More wind power, lower bills

Lastly, new analysis conducted by Synapse Energy Economics on behalf of Americans for a Clean Energy Grid has looked at the potential rate effects of wind energy and transmission in the Midwest ISO region of the United States.

The analysis concludes that adding more wind power to the electric grid could reduce wholesale market prices by more than 25 percent in the Midwest region by 2020. It found that wind power could drive down the wholesale price of power by $3-$10 per MWh in the near term and up to nearly $50 per MWh by 2030. “Those savings would be passed along to consumers through lowering retail electricity prices by $65-$200 each year,” said the authors of the analysis.

The analysis also found that new transmission is needed in the region to tap wind power; however, investments in transmission are small compared to the savings they would reap, providing more than a 2 to 1 return on investment throughout various scenarios.

For additional information:

Global Wind Energy Council

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