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Wind turbine costs and prices have fallen to their lowest level for several years, with an over-capacity on the part of the manufacturers helping to shift the market in favor of the buyer. Increased scale and efficiency improvements have also contributed, making the picture look rather rosy for the wind power generation companies.
||In the middle half of the last decade, prices more than doubled, from $1.2m per MW in 2003, to $2.5m per MW in 2008.|
This reversal of price trends sees the current capital cost of turbines at around $1.7m to $1.8m per MW. During the period from 2003 to 2008, wind power companies migrated to the USA to catch the tide of the vast wind power market and to take advantage of the low dollar against the rising Euro. Setting up manufacturing facilities in America would save them the cost of transporting component parts from Europe and Asia.
According to the latest issue of the Bloomberg New Energy Finance Wind Turbine Price Index, prices globally continue to be pushed downward. They have studied data from almost thirty of the world’s biggest wind turbine purchasers, with a total of around 7 GW of power covered by 150 confidential contracts. These are spread around the world, although they are concentrated mostly in America and Europe.
With wind turbine costs and prices dropping so dramatically, this brings them within the range of competition with gas and coal generated power. With the latest contracts showing an average price per Megawatt of $1.33m for wind power installations, these prices are around 7% down on the previous year and 19% down on their peak in 2007-8. With such fierce competition, some of the top manufacturers have brought their prices down as low as $1.22m per MW, bringing down the global average. The US has the lowest priced market, with an average value of $1.27m per MW.
Wind power generated electricity costs are now at an all time low. Projects in areas such as the US, Brazil and Mexico show normalized costs of less than $68 per MWh. This excludes national fuel subsidies but takes capital costs and maintenance into account. By comparison, the estimated average cost for coal-fired electricity is $67 per MWh and for gas, $56 per MWh.
The cost of onshore wind turbine capacity in terms price per MW has now fallen below the previous levels, before the price of steel and other materials shot up. This has been helped, not only by the competition for sales, but by better yields from the turbines through design improvements. These include much taller towers, typically 100 meters instead of the 65 meters of 2003, with correspondingly larger rotors.
Buyers surveyed by Bloomberg say they expect wind turbine costs and prices to remain stable at their present levels for the next two years, with price reductions having bottomed out. Their general view is that, as demand grows following recovery from the global recession, prices will gradually begin to rise from 2012-13. In the long term, the current low costs should lead to greater uptake of wind power generation, resulting in huge savings for the electricity consumer.