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OWOE - Wind Power - What is the cost of electricity produced from wind energy?
  Figure 1 - Declining Cost of Wind Power per KWH
 
Figure 1 - Declining Cost of Wind Power per KWH
 
Figure 2 - Unsubsidized Levelized Cost of Energy Comparison (Lazard 2016)
 
What is the cost of electricity produced from wind energy?

Per US Department of Energy data, on average wind Power Purchase Agreement (PPA) prices have steadily and significantly declined since 2009. After peaking at nearly 7 cents per kilowatt-hour (kWh) in 2009, the national average PPA price has fallen to around 2.35 cents per kWh in 2014. Figure 1 illustrates the dramatic decline in wind energy price per kWh from 1980 through 2012. At the 2.35 cents per kWh price in 2014 wind energy is competitive with wholesale electricity prices and conventionally generated power across many areas of the United States.

As further example of the cost competitive nature of wind energy today, Figure 2 plots the Levelized Cost of Electricity (LCOE), which represents the per-kilowatthour cost of building and operating a generating plant, for both alternative and conventional power sources. At the low end of the cost range, i.e., in those locations and conditions that are best suited for wind power, wind LCOE beats all other sources. And across the entire range of developments, wind is competitive with the least costly of the conventional fuel developments, combined cycle gas plants. Note that the triangle at $118/kW-h is an estimated midpoint for offshore wind.

Much of the decline in cost that resulted in this situation can be attributed to advances in technology. This includes the equipment itself including taller turbines, larger roters, and more efficient components that help to better capture wind energy. But it also includes improvements in locating turbines to improve upon the amount of wind energy available. Current government subsidies have provided additional incentives to fund new wind turbine installations. It is expected that further advances in technology will reduce the cost and make it cost competitive with all sources of electrical power in all 50 states without the need for subsidies.


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