“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.
“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.