Since the first major installations of commercial-scale wind turbines in the 1980s, the cost of energy from wind power projects has decreased substantially due to larger turbine generators, towers, and rotor lengths; scale economies associated with larger projects; improvements in manufacturing efficiency, and technological advances in turbine generator and blade design. These technological advances have allowed for higher generating capacities per turbine and more efficient capture of wind, especially at lower wind speeds.
For a specific wind project in a specific location, however, the cost can vary substantially depending on wind speed, project size, ownership structure, available financing options, and site-specific construction costs. The economics of most wind projects are also affected by the availability of tax and policy incentives. This discussion of long-term cost trends focuses on wind power's fixed costs, performance characteristics, operations and maintenance, financing terms, and tax incentives.
In New England, the presence of strong winds in many locations combined with some of the highest electricity prices in the nation have captured the interest of many wind project developers. However, wind projects in New England tend to be smaller with higher unit costs than projects in Texas or the Great Plains states for the following reasons:
- New England has high land values because of a greater population density.
- New England has smaller land parcels, which leads to a greater number of sponsoring landowners and interested parties.
- New England's varied terrain often has limited access, which increases construction costs.
- Locations with the highest chance of development success often have moderate wind speeds.
This section of the Web site compares New England's wind resources, financing and ownership options, plant sizes, construction costs, and permitting costs to other parts of the country.
The direct costs of larger wind farms in windier areas are now considered economically competitive with "conventional" fossil fuel power plants in many locations. In comparing the economics of wind to other types of electricity generation on an apples-to-apples basis, it is critical to consider both direct and indirect costs, portfolio issues (cost volatility and fuel diversity), the value of the output, and the cost of integrating an intermittent generation resource into the regional electric system. This page shows how wind prices compare to wholesale power prices throughout the United States and discusses how intermittency impacts the value of wind production.
More Information
Annual Report on U.S. Wind Power Installation, Cost and Performance Trends: 2006 (PDF 2.5 MB) Download Adobe Reader
Prepared by the U.S. Department of Energy.
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Prepared by the American Wind Energy Association.
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Prepared by the American Wind Energy Association.
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Prepared by Wind Powering America.
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