Offshore wind costs in Europe are around $170/MWh, and go down to $100/MWh in Asia. Irena identified a significant drop in offshore costs between 2013 and 2014, which brings last month's offshore cost calculation down from around $185/MWh to around $155/MWh. Irena suggests that there could be a significant drop in offshore generating costs by 2020, to approximately $110/MWh.
Irena confirms that turbine prices and installed costs are falling slowly. The report shows that even when integration costs are included, onshore generation costs remain competitive with those of fossil-fuel sources.
The analysis also shows costs vary depending on project size, turbine size and region. Regional factors are key, with costs for onshore wind energy generation varying from around $55/MWh in China to $120/MWh in other parts of Asia. These variations are shown in the chart below. There are also considerable differences in each area — the spread in Europe, for example, ranges from $40/MWh to around $150/MWh, although the report does not elaborate on these variations.
Operation and maintenance costs can be difficult to ascertain, as it is not always clear which elements are included. The increasing reliability of wind turbines, however, is leading to significant reductions. The Irena study shows that the costs of service provision have fallen from $47/MWh in 2008 to around $28/MWh in 2013, as shown in the graph on the left. It is uncertain whether the downward movement will continue as the downward trend shows signs of slowing.
The study quotes an analysis by Sandia National Laboratories in the US. The operational availability of a sample of wind turbines in the US increased from 94.8% in 2011 to 97.6% in 2013. The most common cause of stoppages was the rotor, responsible for around 37 outage events in the year, but the mean downtime per event was less than one hour. The electrical generator was responsible for 19 stoppages per year, but the mean downtime there was only about half an hour. Statistics for gearboxes were similar, which indicates that these components, which have been a source of problems in the past, are becoming more reliable.
Risk and resilience
Two recent reports have highlighted the issues of risk and resilience in relation to electricity systems. One, the American Coalition for Environmentally Responsible Economies' 2014 update, Practising Risk-Aware Electricity Regulation, put onshore wind as the generation technology with the lowest cost and lowest risk — apart from energy-efficiency measures. It rated solar PV on a par for risk, but more expensive. Geothermal has higher risk and higher cost, while the fossil technologies are all considered to have higher risk and higher cost, with the exception of natural gas combined-cycle plant.
One of the risks associated with the fossil-fuel generation is that the price of fossil fuels changes. Wind projects, in contrast, once built, can deliver electricity at a known price. This point has been picked up by Cambridge Econometrics' The impact of wind energy on UK energy dependence and resilience report, commissioned by RenewableUK. This estimated the value of the coal and gas imports displaced by wind-powered energy in 2013 at £579.5 million (€775.3 million). It also found that 26GW of wind capacity could avoid imports of gas to the value of £3.1 billion in 2020 and £7.4 billion in 2030. The report observed that because wind technology costs are dominated by capital costs, the costs are known up-front and so there is resilience against future volatility in variable (fuel) costs.
AT A GLANCE - THIS MONTH'S REPORT CONCLUSIONS
International Renewable Energy Agency, 2015. Renewable Power Generation Costs in 2014 Wind very competitive with fossil fuels, and offshore costs falling, expected to drop to $110/MWh by 2020.
American Coalition for Environmentally Responsible Economies, 2014. Practising Risk-Aware Electricity Regulation Onshore wind has the lowest risk profile of all generating technologies and the second cheapest cost, after natural gas.
Cambridge Econometrics for RenewableUK, 2015. The impact of wind energy on UK energy dependence and resilience Estimates 20GW of wind capacity could save £7.4bn in gas imports by 2030.
.png)
.png)
