Wind Power Becoming Competitive with Coal
Feb 06, 2011 - STATE DEPARTMENT RELEASE/Contentworks - energycentral.com
A recent study from Bloomberg New Energy Finance says that costs for electricity
generated by onshore wind are now on par with costs for coal-generated power
in the United States and several other markets. That could speed up development
of renewables at a time when the world seeks cleaner sources of energy.
President Obama has called for 80 percent of U.S. energy to come from sources
that produce little or no greenhouse gas emissions by 2035, a goal that will
require increases in wind, solar, hydro and other "green" power sources.
The United States gets about 11 percent of its electricity from renewable sources
WIND BLOWS IN THE RIGHT DIRECTION
Growing sales, more efficient wind turbines and overcapacity in the production
of hardware have pushed the cost of onshore wind power to $68 per megawatt-hour.
That's just above the $67 per megawatt-hour to produce coal-generated electricity,
Bloomberg reported in its latest market analysis.
Electricity from plants fueled by natural gas still costs significantly less
-- $56 per megawatt-hour, Bloomberg reported.
One megawatt-hour can power about 800 average-sized, single-family homes
in the United States for one hour.
The study shows "wind continuing to become a competitive source of large-scale
power," said Michael Liebreich, chief executive of Bloomberg New Energy
"For the past few years, wind turbine costs went up due to rising demand
around the world and the increasing price of steel," he said. "Behind
the scenes, wind manufacturers were reducing their costs, and now we are seeing
just how cheap wind energy can be when overcapacity in the supply chain works
its way through to developers."
Capital costs for offshore wind farms still run up to 50 percent higher than
the cost to develop wind power on land, according to a recent report by SBI
Energy, which tracks the market for renewable energy. Offshore wind turbines
must be larger to withstand high ocean winds, but they can also generate more
power, which helps offset some of the initial investment, SBI wrote.
Despite such challenges, a growing number of nations, including the United
States, are pursuing offshore wind. Turbines at sea have less of an environmental
impact than those on land and they can generate much more electricity.
U.S. PUTS OFFSHORE WIND ON FAST TRACK
In 2010, the United States cleared the way for the first large-scale offshore
wind project off the coast of Massachusetts in the northeastern United States.
That set the stage for proposals to open up other areas for such development,
including the Mid-Atlantic coasts of New Jersey, Maryland, Delaware and Virginia.
The government hopes to deploy 10 gigawatts of offshore wind energy capacity
by 2020, and 54 gigawatts by 2050. Millions of homes could get their power
from wind that way.
The U.S. Department of the Interior has put the Mid-Atlantic projects on
an expedited approval track, and leases to developers could be offered by late
2011, the agency said. To support those projects, the Department of Energy
has announced $50.5 million in new funding to develop new wind turbine designs
and to identify market barriers to wind energy.
The government recently gave a $1.3 billion loan guarantee to the world's
largest wind farm that will be developed in eastern Oregon in the northwestern
Although the rate of growth in U.S. wind installations slowed in 2010, the
industry continues to expand. This is largely thanks to a federal tax credit
that makes renewable energy more competitive with coal and other fossil-fuel
sources, which long have enjoyed federal subsidies.
Thirty-seven states now have commercial wind stations within their borders,
the American Wind Energy Association (AWEA) reported recently. Iowa, with 20
percent of its power coming from wind, leads the pack.
In the last five years, 400 manufacturing plants have been built or expanded
to produce wind energy equipment, said AWEA Executive Director Denise Bode "We're
going to be making a whole lot more affordable, homegrown electric power in
the years to come," she said.