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?
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, the province where 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 $/megawatt hour or MWh) over the life cycle of a renewable energy system.
Two recent studies, one in Ontario and one in the US, look at levelized costs. The Ontario Planning Outlook, released by the province’s Independent Electricity System Operator in September 2016, finds that the levelized unit energy cost of wind is $65-210 per megawatt hour (6.5-21.0 cents per kilowatt hour), the lowest of any electricity generation option available to Ontario. By comparison, hydro-electric power is $120-240 per megawatt hour; nuclear is $120-290 per megawatt hour; natural gas is $80-310 per megawatt hour; and solar photo-voltaic is $140-290 per megawatt hour.
The US study, Lazard’s Levelized Cost of Energy Analysis – Version 9.0, published in November 2015, similarly concluded that wind energy was the lowest cost electricity generation option in the US.
In addition, the US Energy Information Administration (EIA) 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 operations and maintenance 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
(Question answered April 2014)