There’s never been a better time to invest in wind power
Here’s a talking point that never gets old—American wind power is 67 percent cheaper than it was in 2009. That means in many parts of the country, wind is now the cheapest source of new electric generating capacity, and it’s cost-competitive in many more. These cost reductions come from a variety of new efficiencies.
Technological advances allow modern wind turbines to reach stronger, steadier winds. That lowers costs and increases the amount of electricity each turbine generates. Improved domestic manufacturing has played an important role too. Today more than 500 U.S. factories build wind-related parts, which creates economies of scales and lowers transportation costs. And innovations in operations and maintenance– like deploying drones, increasing digitization and learning from big data– lower the costs of keeping wind farms up and running.
In fact, investment firm Lazard Inc. reported late last year that, “in some scenarios the full-lifecycle costs of building and operating renewable-based projects have dropped below the operating costs alone of conventional generation technologies such as coal and nuclear. This is expected to lead to ongoing and significant deployment of alternative energy capacity.”
The 2015 bipartisan extension of the Production Tax Credit, which will be gone after 2019, has given businesses the policy certainty needed to confidently invest and hire workers who accelerate these cost declines.
The proof of wind’s cost-competiveness is in the numbers:
- Check out the responses to Xcel Energy’s request for new power proposals in Colorado– wind power clocked the lowest median bid of $18.10/megawatt hour (MWh). Remember—that means half of the bids received were lower than $18.10/ MWh. Nor was this a small sample size. Over 100 wind projects were proposed in response to the RFP, surpassing a combined 4,000 megawatts (MW) of wind. That demonstrates that these low bids weren’t one-off outliers, but rather indicative of real industry costs.
- Rocky Mountain Power (a division of PacifiCorp) released a 2017 RFP requesting up to 1,270 MW of new wind capacity. After reviewing the results, Rocky Mountain Power estimated increased customer benefits of $177 million, in a medium case scenario through 2050, to construct and acquire the new wind capacity, including building the necessary transmission lines and network upgrades. The filing states that customers will “gain access to significant new wind and transmission resources, with important environmental and system reliability attributes, and still enjoy lower overall costs as a result of this investment.”
- Xcel Energy’s Southwestern Power Company power purchase agreement with the Bonita wind project is another example where low-cost wind will save New Mexico customers money. The levelized price over the 30-year term is $22.40/MWh, starting at $18.10 the first year and escalating at 2 percent annually—a highly competitive price point.
These low-cost wind contracts are saving money for families and businesses across the country. That’s proof that there has never been a better time to add more wind to the U.S. electricity mix.