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Development of the Cost of Wind-Generated Power

The rapid European and global development of wind power capacity has had a strong influence on the cost of wind power over the last 20 years. To illustrate the trend towards lower production costs of wind-generated power, a case that shows the production costs for different sizes and models of turbines is presented in Figure 1.10. Due to limited data, the trend curve has only been constructed for Denmark, although a similar trend (at a slightly slower pace) was observed in Germany.

Figure 1.10 shows the calculated unit cost for different sizes of turbines, based on the same assumptions used in the previous section:  a 20-year lifetime is assumed for all turbines in the analysis and a real discount rate of 7.5 per annum is used. All costs are converted into constant 2006 prices. Turbine electricity production is estimated for two wind regimes - a coastal and an inland medium wind position.

The starting point for the analysis is the 95 kW machine, which was installed mainly in Denmark during the mid 1980s. This is followed by successively newer turbines (150 kW, 225 kW), ending with the 2000 kW turbine, which was typically installed from around 2003 onwards. It should be noted that wind turbine manufacturers generally expect the production cost of wind power to decline by 3-5 per cent for each new turbine generation they add to their product portfolio. The calculations are performed for the total lifetime (20 years) of the turbines; calculations for the old turbines are based on track records of more than 15 years (average figures), while newer turbines may have a track record of only a few years, so the newer the turbine, the less accurate the calculations.

 

Figure 1.10: Total Wind Energy Costs per Unit of Electricity Produced, by Turbine Size (c€/kWh, constant 2006 prices).

Source: Risø

The economic consequences of the trend towards larger turbines and improved cost-effectiveness are clearly shown in Figure 10. For a coastal position, for example, the average cost has decreased from around 9.2 c€ /kWh for the 95 kW turbine (mainly installed in the mid 1980s), to around 5.3 c€ /kWh for a fairly new 2,000 kW machine, an improvement of more than 40 per cent over 20 years (constant 2006 prices).