TY - JOUR
T1 - Land-Based Wind Energy Cost Trends in Germany, Denmark, Ireland, Norway, Sweden and the United States
AU - Duffy, Aidan
AU - Hand, Maureen
AU - Wiser, Ryan
AU - Lantz, Eric
AU - Riva, Alberto
AU - Berkhout, Volker
AU - Stenkvist, Maria
AU - Weir, David
AU - Lacal-Arantegui, Roberto
N1 - Publisher Copyright:
© 2020 Elsevier Ltd
PY - 2020
Y1 - 2020
N2 - This paper presents work by the International Energy Agency's Task 26 ‘Cost of Wind Energy’ on technological and cost trends in land-based wind energy in six participating countries (Denmark, Germany, Ireland, Norway, Sweden, United States) and the European Union between 2008 and 2016. Results indicate that there is a general trend towards larger, taller machines with lower specific powers resulting in higher capacity factors, despite small falls in new site wind resources in most countries, while wind project capital costs and project finance costs also fell. This resulted in an average levelized cost of energy (LCOE) fall of 33% for new projects to 48€/MWh at the end of the study period. Analysis of the components of levelized cost change indicated that changes in specific power, financing cost and capital cost accounted for 45%, 25% and 17% respectively of the estimated reduction. It is therefore important that trends in technological factors such as specific power are considered when assessing wind energy learning rates, rather than just capital costs, which has been the primary focus heretofore. While LCOEs have fallen, the value of wind energy has fallen proportionately more, meaning grid parity appears no closer than at the beginning of the study. Policymakers must therefore consider both the cost and value of wind energy, and understand the volatility of this gap when designing land-based wind energy policy measures.
AB - This paper presents work by the International Energy Agency's Task 26 ‘Cost of Wind Energy’ on technological and cost trends in land-based wind energy in six participating countries (Denmark, Germany, Ireland, Norway, Sweden, United States) and the European Union between 2008 and 2016. Results indicate that there is a general trend towards larger, taller machines with lower specific powers resulting in higher capacity factors, despite small falls in new site wind resources in most countries, while wind project capital costs and project finance costs also fell. This resulted in an average levelized cost of energy (LCOE) fall of 33% for new projects to 48€/MWh at the end of the study period. Analysis of the components of levelized cost change indicated that changes in specific power, financing cost and capital cost accounted for 45%, 25% and 17% respectively of the estimated reduction. It is therefore important that trends in technological factors such as specific power are considered when assessing wind energy learning rates, rather than just capital costs, which has been the primary focus heretofore. While LCOEs have fallen, the value of wind energy has fallen proportionately more, meaning grid parity appears no closer than at the beginning of the study. Policymakers must therefore consider both the cost and value of wind energy, and understand the volatility of this gap when designing land-based wind energy policy measures.
KW - Levelized cost of energy
KW - Market value of wind energy
KW - Technology trends
KW - Wind energy
UR - http://www.scopus.com/inward/record.url?scp=85088826201&partnerID=8YFLogxK
U2 - 10.1016/j.apenergy.2020.114777
DO - 10.1016/j.apenergy.2020.114777
M3 - Article
AN - SCOPUS:85088826201
SN - 0306-2619
VL - 277
JO - Applied Energy
JF - Applied Energy
M1 - 114777
ER -