It’s Official: Wind Power Is Catching Up To Natural Gas

August 19th, 2019 by Tina Casey

If you blinked, you missed it. Last week the US Department of Energy released a new report indicating that the price of wind power is becoming competitive with natural gas for electricity generation in some markets. Good luck finding the press release, though. It’s a no-show on the Energy Department home page as of this writing, even though it vindicates the considerable time, effort, and money the agency has poured into promoting the US wind industry over years. Oh, wait…

How Low Can US Wind Power Go?

The new 2018 Wind Technologies Market Report came out on August 12. CleanTechnica caught wind of it, so to speak, on August 17. You can catch a summary and link on the web page of the Energy Department’s Wind Energy Technologies Office.

The WETO summary lists four notable “top trends.” What it does not mention is the competitive pressure on natural gas.

For that, you’ll either have to read the full report or go to another entity under the Energy Department umbrella called EMP, the Electricity Markets Policy Group at Lawrence Berkeley National Laboratory in California.

EMP puts a sharp focus on the competition between wind and gas, though their press release is not on Berkeley Lab’s home page as of this writing. Look for it on the EMP page under the suggestive title, “New report finds attractive wind energy prices, at under 2¢/kWh on average.“

Here’s the money quote (emphasis added):

“After topping out at 7¢/kWh for power purchase agreements (PPAs) executed in 2009, the national average price of wind PPAs has dropped to below 2¢/kWh—though this nationwide average is dominated by projects that hail from the lowest-priced Interior region of the country. These prices, which are possible in part due to federal tax support, compare favorably to the projected future fuel costs of gas-fired generation.”

More & Better Wind Power

The new report credits a drop in the installed cost of wind turbines, with increased capacity and scaling, and lower operating costs and favorable interest rates for much of the decline (also see page 60 of the pdf for more detail):

“Bigger turbines are enhancing wind project performance: Increased blade lengths have dramatically increased wind project capacity factors, one measure of project performance, and taller towers are on the horizon.”

According to report, the capacity factor among new wind farms installed between 1998 and 2001 was only 24%. That jumped to 42% for the average from 2014 through 2017.

If you caught that thing about taller wind turbine towers, run right out and buy yourself a cigar. Taller towers will help move wind power into key areas of the US, like the heavily populated southeast. Southeastern states do not enjoy premium wind quality near the ground, but taller towers could open up wind development throughout the region.

With Friends Like These

Interestingly, one main finding of the report is the contribution of wind energy to the power grid in states where the popular vote went to President* Trump.

That’s noteworthy because the President regularly disparages wind energy while talking up coal, though lately he seems to have dropped the topic of coal in favor of natural gas. Just saying.

According to the new report, in 2018 wind contributed more than 30% of total electricity in Kansas, Iowa, and Oklahoma. It contributed more than 10% in 11 other states.

The national average is still just 6.5%, but the performance of those top 14 states demonstrates how quickly the nation’s electricity profile could be transformed.

Bad News For Natural Gas

Before you break out the bubbly, the report does raise some red flags about the ability of US wind capacity to continue expanding at a rapid pace. Expiration of the federal wind tax credit and the possibility of lower prices for natural gas are two of them.

Nevertheless, the idea of locking in new natural gas power plants for the next 20 years or so is already giving pause to policy makers, at least among local governments and private sector stakeholders if not at the federal level.

Low prices for wind power are just one factor. Policy makers are also considering the high, and growing, demand for renewable energy by leading US corporations, small businesses, nonprofits and the general public as well as the US Department of Defense and other government agencies.

The nation’s sprawling network of rural electric cooperatives is also beginning to ditch fossil fuels in favor of renewables, so there’s that.

CleanTechnica is reaching out to EMP for an explainer on difference between trends in the installed cost of wind turbines and the value of wind power on the grid, so stay tuned for more.

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*Developing story.

Photo (screenshot): US Department of Energy.









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