Quantcast
Energy

Wind Power Costs Could See Another 50% Reduction by 2030

By John Hensley

Fresh off the first-ever American Wind Week, the Department of Energy (DOE) National Renewable Energy Laboratory (NREL) released a new report finding wind energy cost reductions of 50 percent are possible by 2030. That's on top of the 66 percent cost reduction since 2009.

Envisioning the wind plant of the near-future—a "collection of intelligent and innovative machines operating in a highly coordinated way"—NREL expects advancements in wind turbine design, materials and controls to unlock major performance improvements and cost reductions.


Advanced turbines will produce significantly more electricity, allowing wind to provide the lowest-cost form of electricity in many states and regions, without any policy incentives. NREL's findings demonstrate how the federal wind Production Tax Credit (PTC) is successfully driving economies of scale and efficiency improvements, and address concerns that wind power deployment will drop as the PTC phases down.

Wind Cost Projections

Prior to NREL's report, the most recent evidence foreshadowing further wind power cost reduction came from a 2016 study funded by the DOE. Surveying experts around the world, that study found anticipated cost reductions ranged from 24 to 30 percent by 2030. Under more aggressive circumstances, experts predicted cost reductions as high as 40 percent as research and development programs and technology learning lead to additional efficiencies, as shown below.

Lawrence Berkley National Laboratory

Building on these projections, NREL predicts a "SMART" wind plant of the future will be able to achieve even further cost reductions—up to 50 percent by 2030. The wind turbine of the future will be much larger, sit atop a taller tower, use next generation blades, and incorporate intelligent controls and remote monitors. Towers reaching 135 meters will access more consistent wind resources, while next-generation blades stretching more than 70 meters will help the wind turbine capture more of that resource as efficiently as possible. This will enable capacity factors more than 50 percent, all while the installed cost per kilowatt falls and plant life expectancy grows.

On an unsubsidized basis, these improvements and cost reductions will drive the levelized cost of wind energy from roughly $55/megawatt hour (MWh) in 2015 to $31/MWh in 2030.

Capital Stack Shifts to Enable Further Cost Reductions

Improvements in wind project financing structures will enable further cost reductions. Shifting away from equity to debt and using innovative financing mechanisms like yieldcos will reduce financing costs and the bottom-line cost of wind energy.

Recognizing this eventual shift to higher debt-to-equity rations, NREL estimates that the cheaper capital stack will unlock a further $8/MWh reduction in wind energy costs (falling from $31/MWh to $23/MWh on an unsubsidized basis) by 2030, as indicated below.

Comparison to Other Findings

A number of presentations and market analyses this year confirm that the cost reductions NREL projects are achievable—and, in a few cases, too conservative.

Let's begin with the Goldman Sachs Group Inc. In a recent report, the investment bank concludes that "the U.S. power sector already appears in the early stages of a technological mix revolution given a combination of political, technological and now social tailwinds driving improved economics and demand for renewables." Goldman predicts new wind and solar capacity of more than 200 gigawatts (GW) by 2030, primarily driven by economics.

Confirming the economic tailwinds for wind energy, Pattern Energy CEO Mike Garland forecasts wind energy prices will settle between $30-$40/MWh as the PTC phases out and into the long term. The company is already seeing significant improvements in energy production and cost for wind projects the company is bidding for delivery post-2020.

Most tellingly, NextEra Energy Resources anticipates even more aggressive wind cost reductions. The largest owner of wind power capacity in the U.S. expects wind power to be the lowest cost energy resource in the post-2020 period on an unsubsidized basis, ranging from $20-$30/MWh.

This aggressive cost trajectory is consistent with the industry's history of beating even the most aggressive cost projections. In 2008, DOE predicted (page 148, converted to 2016 dollars) that the U.S. wind industry could reduce wind costs to $1,850/kW by 2030. By 2016, the industry had already beaten that projection and driven costs down to $1,587/kW. That 2008 DOE study also estimated that the best wind sites could reach capacity factors of 36 percent by 2015 and 38 percent by 2030. Wind projects installed in 2014 and 2015 have an average capacity factor of 42.6 percent, beating DOE's 2030 target by a wide margin 15 years early.

Conclusion

Progress towards the wind power plant of the future is predicted to unlock substantial additional cost reductions. In 2030, NREL expects unsubsidized LCOEs to range from $19/MWh to $32/MWh, with the central expectation at $23/MWh. At these cost levels, wind energy will be competitive with all other energy sources across much of the U.S., providing a win-win for consumers and public health.

Show Comments ()

EcoWatch Daily Newsletter

Sponsored
Popular
Kodachrome25 / Getty Images

Roof-to-Garden: How to Irrigate with Rainwater

By Brian Barth

The average American household uses about 320 gallons of water per day, a third for irrigation and other outdoor uses. Collecting the water flowing down your downspouts in rainstorms so you can use it to irrigate in dry periods is often touted as a simple way to cut back. But setting up a functional rainwater irrigation system—beyond the ubiquitous 55-gallon barrels under the downspout, which won't irrigate much more than a flower bed or two—is a fairly complicated DIY project.

Keep reading... Show less
Health
A family wears face masks as they walk through the smoke filled streets after the Thomas wildfire swept through Ventura, California on Dec. 6, 2017. MARK RALSTON / AFP / Getty Images

How to Protect Your Children From Wildfire Smoke

By Cecilia Sierra-Heredia

We're very careful about what our kids eat, but what about the air they breathe?

Keep reading... Show less
Health
Hero Images / Getty Images

Study: Children Have Better Nutrition When They Live Near Forests

Spending time in nature is known to boost mental and emotional health. Now, a new global study has found that children in 27 developing nations tend to have more diverse diets and better nutrition when they live near forests.

The paper, published Wednesday in Science Advances, provides evidence that forest conservation can be an important tool in promoting better nutrition in developing countries, rather than clear-cutting forests for more farmland.

Keep reading... Show less
Health
Navy torpedo bomber spraying DDT just above the trees in Goldendale, WA in 1962. USDA Forest Service

Maternal DDT Exposure Linked to Increased Autism Risk

A study published in the American Journal of Psychiatry Thursday found that mothers exposed to the banned pesticide DDT were nearly one-third more likely to have children who developed autism, Environmental Health News reported.

Keep reading... Show less
Sponsored
GMO
Significant cupping of leaves from dicamba drift on non-Xtend soybeans planted next to Xtend beans in research plots at the Ashland Bottoms farm near Manhattan, KS. Dallas Peterson, K-State Research and Extension / CC BY 2.0

Top Seed Companies Urge EPA to Limit Dicamba

Two of the nation's largest independent seed sellers, Beck's Hybrids and Stine Seed, are urging the U.S. Environmental Protection Agency (EPA) to place limits on the spraying of the drift-prone pesticide dicamba, Reuters reported.

This could potentially hurt Monsanto, which along with DowDupont and BASF SE, makes dicamba formulations to use on Monsanto's Xtend seeds that are genetically engineered to resist applications of the weedkiller. Beck's Hybrids and Stine Seed, as well as other companies, sell those seeds.

Keep reading... Show less
Food
Baby son in high chair feeding father. Getty Images

Baby Food Tests Find 68 Percent Contain 'Worrisome' Levels of Heavy Metals

Testing published by Consumer Reports (CR) Thursday found "concerning levels" of toxic metals in popular U.S. baby and toddler food.

The consumer advocacy group tested 50 nationally-distributed, packaged foods designed for toddlers and babies for mercury, cadmium, arsenic and lead.

Keep reading... Show less
Sponsored
Popular
Interior Secretary Ryan Zinke talks to journalists outside the White House West Wing before attending a Trump cabinet meeting on Aug. 16. Chip Somodevilla / Getty Images

Zinke Announces Plan to Fight Wildfires With More Logging

The Trump administration announced a new plan Thursday to fight ongoing wildfires with more logging, and with no mention of additional funding or climate change.

Keep reading... Show less
Energy
Wangan and Jagalingou cultural leader Adrian Burragubba visits Doongmabulla Springs in Australia. The Wangan and Jagalingou are fighting a proposed coal mine that would likely destroy the springs, which are sacred to the Indigenous Australian group. Wangan and Jagalingou

Indigenous Australians Take Fight Against Giant Coal Mine to the United Nations

By Noni Austin

For tens of thousands of years, the Wangan and Jagalingou people have lived in the flat arid lands of central Queensland, Australia. But now they are fighting for their very existence. Earlier this month, they took their fight to the United Nations after years of Australia's failure to protect their fundamental human rights.

Keep reading... Show less
Sponsored

mail-copy

The best of EcoWatch, right in your inbox. Sign up for our email newsletter!