U.S. Department of Energy report: Wind power costs near record low

The U.S. Department of Energy has released its Wind Technologies Market Report 2012, with some exciting findings concerning the cost of wind power.  Highlights:

–  Capital cost continues to drop, hitting an average of $1,940/kW for the capacity installed during 2012. (Note: many of the megawatts of new capacity installed in 2012 were purchased in 2010/2011 at those prices, so capital costs should drop further as lower-cost turbines sold during 2011/2012 are installed in 2013/2014.)

– The average cost of energy as reflected in power purchase agreements (PPA) for wind is similarly continuing to fall, with the average PPA price signed during 2012 of $38.34/MWh, down from $42/MWh for PPAs signed during 2011 and $60/MWh for PPAs signed during  2010.  Regional PPA prices for 2012 range from $31-$84/MWh.


– The capacity factor of new wind projects continues to increase, hitting an average for turbines installed during 2011 (operating a full year in 2012) at 33%, adjusting for curtailment (wind projects are sometimes "curtailed"–turned off–at times of low electricity demand).  Note: Turbines installed during 2012 don’t have a full year of operation as yet, so we will find out what their average capacity factor is after a full generation year in 2013.

– The domestic content of new wind turbines installed in the U.S. continued to hold steady in 2012 at approximately 70 percent.

This new report is further evidence of what we have been seeing from other sources, in particular utilities reporting on the very favorable prices of new wind projects. With its combination of lower prices and improved performance, wind is becoming a strong competitor.

Related articles:

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