Wind Energy Costs Super Low, Despite Heartland Shenanigans (Chart & Graphs)

October 20th, 2014 by Joshua S Hill

That we here at CleanTechnica — and myself in particular — are big proponents of wind energy is probably of little surprise to regular readers. But we have good reason to be, given the industry’s continuing growth and popularity and technological development the world over.

Last week, we covered the preliminary report published by the European Union which highlighted wind energy’s affordability over all other forms of electricity, including coal. Hidden amidst the numbers and devoid from all the press releases was the fact that, when “externalities” are taken into account — such as air quality, climate change, human toxicity, etc — onshore wind has an approximate cost of just €105 per megawatt-hour (MWh), considerably lower than any other electricity option.

The news came from the European Wind Energy Association, as neither of the press releases published by the European Union made any mention of wind energy’s affordability.

Following that analysis, the American Wind Energy Association Friday posted a piece showing that there are in fact three recent studies, including the EU’s study, that highlight wind energy’s low cost and ability to reduce carbon emissions.

The three reports each proved that “wind energy is one of the lowest cost options for reducing carbon emissions,” with each focusing on a different attribute of wind energy’s performance.

A report from Wall Street investment firm Lazard showed that the levelised cost of energy has dropped significantly over the past few years (a 5-year percentage decreases of 58%), but now costs less than all other new generation options. In fact, scanning through the figures provided by Lazard in its report (PDF), I was impressed just how often wind energy is the cheapest form of energy across the board.

The EU report has already been addressed here, and previously, which pins wind energy as the lowest cost energy source when externalities such as public health and environmental costs are weighed into the equation. While a third report, published by the US Department of Energy in August, confirms that the cost of wind energy, as seen in recent utility wind purchase agreements, has fallen by more than half over the past five years. Moreover, the report (PDF) notes that recent price reductions, “coupled with improved turbine technology and more-favourable terms for turbine purchasers, have exerted download pressure on total project costs and wind power prices.”

However, despite the obvious findings from reports compiled around the globe and for glaringly different audiences (Lazard — investors; European Union — European governments; US DoE — US wind industry), anti-wind groups are going out of their way to misappropriate data to strengthen their (floundering) case.

In its blog post disseminating the results of the aforementioned reports, AWEA also highlight the actions of anti-wind groups in misrepresenting a report prepared by the Midwest grid operator (MISO) “of the potential costs of complying with EPA’s pending Clean Power Plan to limit emissions of carbon dioxide from existing power plants.”

According to AWEA:

Some anti-wind groups have taken the results out of context, ignoring important caveats in the draft in an effort to attack wind energy.

These actions have forced MISO to halt its presentation of the results because its figures have been taken out of context, all the while acknowledging its findings’ limitations.

Another recent attempt by outspoken anti-wind proponents has also been poked full of holes by AWEA. In another piece from last Friday, AWEA turned its attention to recent comments made by Heartland Institute fellow James Taylor. Writing an opinion piece on Forbes.com, Taylor claimed that “electricity prices are soaring in states generating the most wind power,” basing his “insights” on US Energy Information Administration data.

There is obvious history between Mr Taylor and AWEA, as mentioned in the second-to-last paragraph of the AWEA post, which explains the contrary nature of the piece. Mr Taylor concluded that “the 10 states with the highest percentage of wind power generation experienced average electricity price increases of more than 20 percent” — a figure which is “seven-fold higher than the national electricity price increase of merely 2.8 percent,” Taylor wrote.

The “cherry picking” — as AWEA describes it — comes when you take into account “the highest percentage of generation” as well as Taylor’s excluding the 11th-highest-percentage state — Texas.

The percentage of generation does not inherently mean that the state in question has a lot of wind power — as proved by the state of Texas, which ranks 11th in terms of percentage of generation derived from wind energy, while still ranking as the state with the most wind power of any state in the country.

As seen in the chart above, provided by AWEA, those states with more than 8% wind energy are experiencing a load-weighted electricity price decline of 0.22%, compared to a price increase of 3.49% for the nation as a whole.

Of course, this is a tale of two numbers, and you’re going to adhere to the numbers that back your own case — it’s the way of things. However, according to AWEA, there are “dozens of press articles” that are blaming coal retrofits as the real reason for electricity price increases in the Midwest and Mountain states.

In the end, reading through James Taylor’s article, even without an existing bias, his argument seems to lack weight and proof. He paints a black and white picture where wind energy’s sheer existence is the only possible reason electricity prices appear to have increased — regardless of other ways to interpret the data, how to interpret it as a whole, and any other factors.









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