What are the capital costs of building a wind farm? In addition, what are the operating costs and the estimated life cycle of wind farms?
Hi Lindsay, in terms of capital costs associated with building a wind farm, various factors are considered depending on unique characteristics of each project, such as cost of borrowing, wind resource, interconnection cost, technology, project size, what province the farm is being sited, etc.
The 2011 Cost of Wind Energy Review conducted by the U.S. National Renewable Energy Laboratory (a national laboratory of the U.S. Department of Energy) determined that “Capital costs for projects installed in 2011 ranged from $1,400/kW to $2,900/kW for utility-scale wind projects.”
Another important consideration is levelized costs, which calculates the unit cost of electricity generation (in $/ MWh) over the life cycle of a renewable energy system.
A technical study commissioned by CanWEA and conducted by Power Advisory, concluded that wind energy is competitive with combined-cycle natural gas and conventional hydro, and more cost effective than new nuclear generation. The study also concluded that wind energy in Ontario has a levelized cost of $134/MWh, and wind turbines can produce energy at a more affordable cost than new nuclear generators. The Power Advisory study determined that the levelized costs of new nuclear are $165/MWh over forty years, significantly higher than wind with a roughly equivalent useful life. This cost differential is large enough that Power Advisory found that it would be more expensive to build new nuclear capacity than to build an equivalent amount of both new wind energy generation and new natural gas generation.
The US Energy Information Administration (EIA) recently published data in 2013 comparing a large number of plant capital and operating costs for numerous technologies. The findings show that onshore wind energy is less than half the cost of advanced nuclear energy with respect to both capital cost and ongoing Operations & Maintenance (O&M) cost. The US EIA Annual Energy Outlook 2013, with Projections to 2040, shows the levelized cost of wind energy (including transmission costs) was less than the levelized cost of nuclear power both in 2020 and 2040. CanWEA commissioned GL Garrad Hassan to examine the price of wind in British Columbia. The GL GH analysis, which included 121 potential onshore wind development sites in British Columbia, found that wind turbine prices have dropped 20 per cent while productivity has increased by almost 30 per cent over the last few years.
What these studies demonstrate is the cost to build wind energy continues to decline, with dramatic drops over the past years while significant efficiency gains are being realized in modern technology and siting.
In terms of operating costs, the fuel that turns the turbine blades is free; this means that once a wind farm is built, the price of electricity it produces is transparent and remains at that level for the entire life of the wind farm.
Modern wind turbines have a 20-25-year lifespan with very low O&M costs relative to other energy sources. Furthermore, often at the end of their life, wind turbines can be “re-powered”, which involves replacing older equipment with newer technology; the re-powered wind farm will then last another 20-25 years after that. Unlike other forms of energy producers, wind energy carries no legacy environment issues when decommissioned; leaving their environments fully restored.
We hope this helps answer your question. For more information on wind energy, please visit our website: http://windfacts.ca/affordable-power
The WindFacts Team
(Question answered April, 2014)