Guess What’s Holding Back Wind Power in the U.S.

The cost of wind energy has dropped drastically over the past several decades as the technology has advanced, especially in the size of turbines. Since 2009, the unsubsidized average cost of onshore wind-energy production has fallen to 4.2 cents per kilowatt hour, from 13.5 cents in 2018, according to an analysis by Lazard, the company I work for. After including U.S. tax subsidies, the cost of building wind capacity is often lower than the marginal cost of generating electricity with existing coal-powered plants. Thus wind energy now offers great opportunities for lowering carbon-dioxide emissions.

But a surprisingly difficult challenge remains: how to move the wind energy from the places where it is produced — often remote areas — to the population centers where it is needed. One reason wind accounts for a greater share of energy produced in Europe — it represents 12% of electricity in Germany and 19% in Spain, compared with just 7% in the U.S. — is not that more wind blows there. It’s partly that European infrastructure facilitates transmission of the power to the places where people live.