On Wind, Obama Sees A Clean Energy Winner

“Among a sample of wind power projects with contracts signed in 2011, the capacity-weighted average levelized price is $35/megawatt-hour, down from $59/MWh for projects with contracts signed in 2010, and $72/MWh for projects with contracts signed back in 2009,” Berkeley Lab said in a statement that accompanied the report’s release.

This is where the “but” comes in.

Siemens Kansas wind nacelle factory

image via Siemens

“But even with today’s much lower wind energy prices, wind power still struggles to compete with depressed natural gas and wholesale power prices in many parts of the country,” Berkeley Lab research scientist and report co-author Mark Bolinger said in a statement.

While the report notes that direct comparison of the price of wind and the wholesale price of electricity “is not appropriate if one’s goal is to fully account for the costs and benefits of wind energy relative to its competition,” the real-world truth is that “absent further reductions in the price of wind power and absent supportive policies for wind energy,” wind will wither.

That could make the U.S. goal of producing 20 percent of its total electricity from wind by 2030 difficult to attain. More immediately, with a number of incentives — the production tax credit, and the 30 percent investment tax credit, and the 30 percent cash grant and bonus depreciation all set to expire – wind is set up for a fall. The report suggested it could be a really big fall, too, with the industry already facing excess capacity in its turbine factories.

“The growth in U.S. wind turbine manufacturing capability and the drop in wind power plant installations since 2009 led to an estimated over-capacity of U.S. turbine nacelle assembly capability of more than 5 (gigawatts) in 2011, in comparison to 4 GW of under-capacity in 2009,” the report says.

Sports columnist, newspaper desk guy, website managing editor, wine-industry PR specialist, freelance writer—Pete Danko’s career in media has covered a lot of terrain. The constant along the way has been a fierce dedication to knowing the story and getting it right. Danko's work has appeared in Wired, The New York Times, San Francisco Chronicle and elsewhere.

  • http://twitter.com/alberthartman Albert Hartman

    You know, whether or not windpower is a great idea does not hinge on the spot price of natural gas. It’s not “genius” when tight supplies make gas-fired electricity 20 cents/KWH and then “stupid” when a new gas supply comes on line and lowers electricity to 5 cents/KWH. Or “stupid” then “genius” then back to “stupid” again as the spot price for natural gas wavers from one day to the next above and below windpower’s price.

    Windpower is a technology that must be viewed by itself. In that light the technology has made marvelous strides and will continue to do so going forward. It is a viable way to power your home today, and also for the future. The technology surrounding it has not stopped improving, so we can expect to enjoy future windpower at even lower costs and better performance. What’s not to like?

    • Pete

      Yep. Long-term focus is key. Thanks for the excellent comment.

      Pete Danko
      EarthTechling