Wind Power to Compete With Fossil Fuels by 2015, Make Says

Onshore wind power will become competitive with traditional fossil fuels in Europe, the U.S. and Asia by 2015, Danish researcher Make Consulting said.

Worldwide, the technology is an average of about 10 percent above grid parity -- the level at which it’s able to compete with other technologies if all are subsidy-free -- according to a paper e-mailed today by Make. Larger and more efficient machines will help wind become competitive within two years, and further drive down costs through 2020, Make said.

“Wind will be a very competitive power generation technology in 2020, cheaper than all the fossil fuel technologies” in the European Union, Robert Clover, research director at Aarhus, Denmark-based Make, wrote in the study. In the U.S., “in 2020 wind will be one of the most competitive power generation technologies, cheaper than coal and nuclear technologies and at least comparable to gas.”

The forecast shows how renewables are moving from expensive carbon-cutting technologies to more mainstream forms of power generation. Investment in new renewable energy generating capacity in 2010 for the first time surpassed spending on new fossil fuel plants, according to Bloomberg New Energy Finance.

Global wind installations rose about 10 percent to a record 44,711 megawatts last year, according to the Global Wind Energy Council, a Brussels-based industry group.

Graphics in the report show the levelized cost for onshore wind at below 75 euros ($98) per megawatt-hour in Europe in 2020, a level comparable to nuclear -- without factoring the costs of decommissioning old atomic plants -- and above only hydro power and geothermal, which are “limited” in their use by geography and geology, according to Make.

Buying Fuel

Levelized costs factor in the lifetime costs of building plants and buying fuel for power generation. In the U.S., the 2020 estimated cost of onshore wind, at just below 60 euros per megawatt-hour, is greater only than combined cycle gas turbines and geothermal. In the Asia Pacific region, nuclear, gas and geothermal are all deemed cheaper than onshore wind in 2020.

London-based analyst Bloomberg New Energy Finance estimates onshore wind currently has a global average levelized cost of energy of about $85.11 per megawatt-hour, a level similar to coal and about 10 percent higher than gas. It puts the cost of offshore wind at $225.80.

Offshore wind power, with its more expensive infrastructure, is still likely to be close to grid parity in the Asia-Pacific region in 2020, according to Make. In Europe, it may reach that benchmark in 2023, and in the U.S., it’ll take until 2026, Make said.

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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