Bookmark and Share

Wind Prices in USA drop to an astoundingly low of 2 cents, as technology advances decrease price from 7 cents in 2009

0 Comment

Wind Energy USA

Wind energy prices in the USA have crashed to a 2 cents/kWh in recent PPAs signed in 2015, with more than 8.9 GW of wind capacity being installed. While this price also includes the federal tax incentive credit and some state incentives, nonetheless the price is spectacularly low and is lower than gas/thermal prices in USA. Wind energy PPAs are being driven by states looking to meet their renewable energy standard (RES) obligations as well as the investment tax credit which provides around 1.5 cents/kWh of benefit.

13DhuleWindfarm_image9

USA is the 2nd largest market in the world in 2015 for wind energy coming after China, which installed a huge 30 GW. Wind energy installed around 63 GW in 2015, up 20% from 2015. The low prices means that wind energy will continue to grow strongly in USA, even as the PTC winds down gradually over the next 5 years as prices are competitive with solar energy but also other fossil fuel forms. The price has come down from around 7 cents/kWh in 2009, mainly due to a sharp reduction in wind turbine prices. Wind turbine technology has improved substantially in the last few years, with all major components such as rotors, blades, towers etc. showing improved costs. The cost of a wind turbine has come down from around $1600/kw in 2009 to $1000/kw now, which has been the main driver behind the reduction in wind energy costs.

Texas was the leader with more than 3.5 GW of capacity being installed making it the No.1 state in overall wind energy capacity being installed. GE was the biggest supplier to the USA in 2015 and the third largest supplier in the world. Vestas was the second biggest supplier keeping the same position as it has in the world markets. Chinese No.1 Goldwind had only got a marginal presence in the USA market as wind energy turbines market remains a specialized market requiring much more sophistication in selling such as O&M and servicing abilities. It also requires a domestic supply chain, which a foreign maker will take a long time to establish. Solar panels on the other hand are a simple commoditized product requiring no domestic supply chain, making it easy for the Chinese players to dominate the USA market.

See the full DOE report which gives tremendous insights in the development of the USA market and the main reasons behind the fall in wind power prices.

PG

Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to greensneha@yahoo.in

No Responses so far | Have Your Say!