Wind power continues to experience strong growth, solid performance and attractive prices in the US, according to a report published by the US Department of Energy (DOE) and prepared by the Lawrence Berkeley National Laboratory (Berkeley Lab). With levelized costs of just over $30 per megawatt-hour (MWh) for new-build projects, the cost of wind is far below its grid system, health and climate benefits.
“Wind power prices, particularly in the central United States, and supported by federal tax incentives, remain low even with ongoing supply chain pressures, with utilities and corporate buyers selecting wind as a low-cost option,” said Ryan Wiser, a senior scientist in Berkeley Lab’s Energy Technologies Area. “Considering the health and climate benefits of wind power makes the economics even better,” he added.
Key findings from DOE’s annual “Onshore Wind Market Report” include the following:
• Wind represents a growing part of the electricity supply. US wind power capacity grew at a strong pace in 2021, with 13.4 gigawatts (GW) of new capacity added representing $20 billion in investment and 32% of all capacity additions in USA Wind energy production increased to account for more than 9% of the country’s electricity supply. At least 247 GW of wind is seeking access to the transmission system; 77 GW of this capacity is offshore wind, and 19 GW are hybrid plants that pair wind with energy storage or solar.
• The performance of wind projects has increased over the decades. The average capacity factor (a measure of project performance) among recently completed projects was nearly 40%, considerably higher than previously built projects. The highest capacity factors are seen inland.
• Turbines keep getting bigger. The plant’s improved performance has been driven by larger turbines mounted on taller towers and with longer blades. In 2011, no turbines used blades 115 meters in diameter or larger, but by 2021, 89% of newly installed turbines had such rotors. Proposed projects indicate that the overall height of the turbine will continue to increase.
• The low prices of wind turbines have lowered the costs of the installed project over the last decade. Wind turbine prices averaged $800 to $950 per kilowatt (kW) in 2021, up 5% to 10% from the previous year, but substantially lower than in 2010. The average installed cost lat of wind projects in 2021 was $1,500/kW, up 40% from the peak in 2010, although stable in recent years. The lowest costs were found in Texas.
• Wind power prices have increased, but remain low, around $20/MWh in the country’s inland “wind belt.” After exceeding $75/MWh for power purchase agreements executed in 2009, the national average wind price has fallen, although supply chain pressures have led to price increases in recent years years. Inside the country’s “wind belt”, recent prices are around $20/MWh. In the West and East, prices tend to exceed $30/MWh on average. These prices, which are possible in part because of federal tax support, fall below the projected future fuel costs of gas-fired generation.
• Wind prices are often attractive compared to the market value of the wind grid system. The value of wind energy sold in wholesale energy markets is affected by the location of wind farms, their hourly output profiles and how these characteristics correlate with real-time electricity prices and markets of capacity The market value of wind increased in 2021 and varied regionally from less than $20/MWh to more than $40/MWh, a range roughly consistent with recent wind power prices.
• The average levelized cost of wind power was $32/MWh for plants built in 2021. Levelized costs vary by time and geography, but the national average was $32/MWh in 2021, a substantial drop historically, though consistent with the previous three years. (Cost estimates do not account for the effect of federal wind tax incentives.)
• The health and climate benefits of wind in 2021 were greater than its value to the grid system, and the combination of all three far exceeds the updated cost of wind. Wind generation reduces the electricity sector’s emissions of carbon dioxide, nitrogen oxides and sulfur dioxide. These reductions, in turn, provide public health and climate benefits that vary regionally, but together are economically valued at an average of more than $90/wind MWh for plants built in 2021.
Berkeley Lab’s contributions to this report were funded by the US Department of Energy’s Office of Wind Energy Technologies.