Despite Higher Costs Wind Rules Renewable Roost

If you ask how much renewables can contribute right now to reducing carbon emissions and fossil fuel dependence, itâ''s really just one renewable that counts: wind. Photovoltaic electricity is still far from competitive commercially, and as for the restâ''thermal solar, geothermal, tidal energy, and so onâ''they only account for niche shares of the generation mix. Wind on the other hand already generates close to 1 percent of U.S. electricity and could provide as much as 20 percent by 2030, according to a recent government report.

That said, the gap between the installation costs of photovoltaic electricity and wind-generated electricity has narrowed some in the last couple of years, despite upward pressure on PV prices, mainly caused by sky-high demand in Germany. A recent report done at the Lawrence Berkeley National Laboratory confirms that higher wind installation prices account for the narrowing.

The LBL report finds that U.S. wind capacity increased 46 percent last year, amounting to a $9 billion investment. Wind installation costs, however, after dropping by about $2.7/Watt from 1982 to 2002â''from roughly $4.2/W to $1.5/Wâ''increased in recent years, plateauing at around $3/W. The main factor in the higher wind costs is the higher average cost of the turbines themselves, which has been driven up by the dollarâ''s depreciation, high global demand, an escalation in raw materials costs that has affected almost all power equipment, and more advanced turbine designs.

Even at the higher installation costs, the price of wind-generated electricity has remained highly competitive in the United States, admittedly in large part because of generous Federal and state subsidies. To arrive at a true estimate of relative prices, those subsidies have to be weighed against the almost incalculable and controversial environmental, social, and political costs of fossil fuels that do not show up in coal, oil, and natural gas prices.

LBLâ''s Annual Report on U.S. Wind Power Installation, Cost, and Performance Trends can be downloaded at the labâ''s publication site.


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