What is the cost of wind energy per kilowatt hour (kWh) compared to the cost per kWh of water, geothermal, nuclear and biomass energy?
The cost of wind energy can vary from one location to another due to a number of factors, including the strength of the wind resource, cost of borrowing, proximity to transmission or distribution lines, interconnection costs, the technology being used, the project size and the complexity of the terrain. Further, the relative cost of wind energy, when compared to other energy sources, depends on a number of additional variables, such as the different kinds of resources available in that area, their fuel costs and other, project-specific details.
All new forms of energy generation will cost more to develop than power plants built a generation or more ago, but recent research by the U.S. investment bank Lazard showed that the price of wind energy is one of the least expensive forms of new electricity generation, without any subsidies.
Today in Canada, new wind energy is less expensive than both new nuclear power and new large hydroelectric development. In its most recent request for wind proposals, Quebec awarded contracts that set a new low average price for wind in Canada at 6.3¢/kWh. In Alberta, the independent electricity system operator found wind energy to be the second lowest cost source of new electricity at 7.5¢/kWh, second only to combined-cycle natural gas, but without the associated environmental costs or unstable prices.
The Lazard report also shows that wind energy is cost-competitive with geothermal and biomass energy sources. (The chart on page 2 of the report should give you an idea of the compared range of costs of various energy sources.)
For more information on the affordability and efficiency of wind energy, visit Affordable Power.
(Question answered January 2016)