Annual Power Costs Comparison: Comparing cost and prices paid

The cost of generating electricity using wind turbines is not the same as the price paid for it in energy markets around the world. Price is determined by market forces, which in the energy sector are almost without exeption influenced by political regulation. In a number of countries, however, purchase rates for wind power (see table, right) do lie within the range of current generating costs (see main article).

by David Milborrow 1 January 2010

In Europe, most purchase rates lie in a EUR60-100/MWh range, although the European average (inflated by some particularly high values) is EUR102/MWh. That average is quite a generous rate, adequate for a wind farm costing as much as EUR1800/kW to install at a site with a mean wind speed of 7 m/s, often found in windier countries but harder to achieve in central Europe.

Payments within a range of EUR70-80/MWh are adequate to support wind farms at sites with mean wind speeds around 7.5 m/s that cost EUR1500/kW to install - the average cost for a median sample of projects taken from a 4 GW database for 2009. A 7.5 m/s wind speed is fairly typical for many good wind farm sites in Europe, North America, and elsewhere. Germany, with relatively low wind speeds, needs a slightly higher rate given the installed cost of wind farms there. China manages with a lower rate as installed costs are lower.

The average European offshore tariff, according to the European Renewable Energy Foundation, is EUR129/MWh, which is well matched to offshore wind farms built at the average current cost, around EUR3400/kW, installed at sites with mean annual wind speeds around 8.5-9 m/s. The Ontario Power Authority is perhaps setting a challenge to its offshore developers by offering a lower rate of EUR119/MWh.

Main Annual Power Costs Comparison article