Publications

Survey of Energy Resources 2007

Wind Energy Costs

As wind energy is not generally cost-competitive with the thermal sources of electricity generation, the pattern of development has been largely dependent on the support mechanisms provided by national governments.

Wind costs have declined steadily and a typical installed cost for onshore wind farms is now around US$ 1 600/kW, and for offshore around US$ 2 400-3 000/kW. The corresponding electricity costs vary, owing partly to wind-speed variations and partly to differing institutional frameworks. Prices paid for wind-generated electricity are mostly in the range US$ 52-90/MWh (Milborrow, 2007) and at the lower end of this range are competitive with coal and gas.

A review of future costs by the Sustainable Development Commission (SDC, 2005) suggested that installed costs onshore in 2020 will lie between 55% and 92% of the 2001 level.  Applying a cautious multiplier of 81% to the 2005 level suggests the 2020 level may be around US$ 1 250/kW.  A more optimistic cost projection from the Global Wind Energy Council (GWEA and Greenpeace, 2006) suggests US$
1 000/kW.

Offshore wind is less well developed, with worldwide capacity around 750 MW, but there are substantial plans in the pipeline. Two of the estimates in the Sustainable Development Commission report suggest installed costs by 2020 will be about 57% of the 2003 level.