The report includes projections of future growth for all energy sources, based on likely changes in fuel prices and other costs, and how they might develop up to 2040.
For onshore wind, the reference case suggests it will grow fairly steadily up to around 2022 and then level out at 144GW. But very little growth is projected for offshore wind.
For wind's principal renewable competitor — solar photovoltaics — strong growth is projected, but it does not overtake wind in capacity terms until about 2039. The growth in solar thermal is very modest, with a total installed capacity of 2.5GW envisaged by 2040.
The capacity of coal plants is expected to decline, nuclear stays constant at 99GW and only combined cycle gas-fired generation is expected to grow.
The EIA's International Energy Outlook, published at about the same time, suggests wind, worldwide, will grow at 4.7% a year up to 2040, by which time global capacity will reach 961GW.
The AEO includes a summary of capital cost projections for new central station electricity-generating technologies.
A comparison with similar data published in 2013, shown in the top chart (below), reveals that the installed costs of gas, coal and nuclear plant have all risen, onshore wind has fallen by 26% (from $2,213/kW to $1,644/kW) and solar PV has fallen by 36%.
Solar thermal has fallen by 18%, but is still about double the cost of onshore wind, and has a lower load factor. The AEO suggests a small increase in the cost of offshore wind, probably reflecting the uncertainty that will continue to exist until the first US installation is online.
The AEO also includes information on the regional variations in the installed costs of the technologies. The cheapest wind is to be found in the South West Power Pool regional entity/south, at $1,378/kW, and the most expensive in the North East Power Coordinating Council/New England, at $2,468/kW. The latter is roughly 50% above the mean value.
As the installed cost of onshore wind continues to fall, it is likely to become more competitive, although falling gas and coal prices, at least in the US, may neutralise that prospect. However, as the next item suggests, the downward trend in installed costs may be halting.
Downward trend for wind project prices slowing
The Lawrence Berkeley National Laboratory's 2015 Wind Technologies Market Report includes an analysis of the manufacturers, technology and performance trends in the US, as well as electricity pricing.
The report charts wind-turbine and project prices, and both suggest the strong downward trend that started in 2008 may be coming to an end. Average project prices can be seen in the bottom chart (above). There was a sharp fall from 2012 to 2013 — to $1,634/kW — followed by a rise in 2014, after which the average fell back to $1,690/kW.
The authors note early data from 2016 suggest prices have levelled out, although it must be emphasised that there are wide variations around the mean values shown on the chart.
The report also includes an analysis of operation and maintenance costs. This shows how these have declined over the past 15 years, but increase with project age, so that by year 11 of operation they can be double those of the first year of operation.
Although the exact content of such costs needs to be carefully scrutinised, typical levels in years 11-15 for projects commissioned in 1998-2004 are at least $25/MWh.
By contrast, recently commissioned projects record levels around $8/MWh.
AT A GLANCE — THIS MONTH'S REPORT CONCLUSIONS
Annual Energy Outlook, US Department of Energy, 2016 Analysis of construction costs for electricity-generating plant shows rising values for thermal generation and offshore wind, but a big fall for onshore wind.
Wind Energy Market Report 2015, Lawrence Berkeley National Laboratory, 2016 Installed cost trends for onshore wind in the US indicate a possible pause in the downward trend evident since 2010.
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