European Energy Group Says Wind Power Now Cost Competitive

Lower costs and environmental benefits are making wind power a popular option in Europe.

Wind power in Europe is emerging as a cost-effective option to the more conventional power choices of coal and natural gas, as these power plants face increased costs and fuel risks, according to a new briefing from Emerging Energy Research (EER), an advisory firm that tracks emerging technologies in global energy markets.

Wind power has significant benefits over conventional generation sources, including minimal risks associated with security of fuel supply, construction time, and carbon emission costs.  

"Wind energy is now in a range that is cost competitive with power from new conventional power plants.  Most importantly, there is no fuel cost, and, therefore, no fuel risk, associated with wind power," said EER research director Keith Hays.

Additionally, as Europe moves towards stricter carbon management regulations, wind and other renewable energy technologies will become more competitive.

As an example, EER compares the costs of generation under a carbon penalty of $38 per metric ton, where the cost of energy production from land-based wind turbines would be well below the cost of natural gas and coal plants at today's levels.
Fuel prices are the most critical factor contributing to the cost of electricity from natural gas plants in Europe, according to EER. Increased commodity prices and more advanced NOx control systems are adding to the investment costs of newer facilities. 

New coal plants being built in Europe must meet an EU directive that requires flue gas desulphurization, increasing the cost of these plants over those built in the previous decade, while higher EPC costs are also having a significant impact, notes EER's analysis.

Although industry scaling has reduced capital and operating costs significantly over the last decade, the last several years have seen supply chain shortages and increased commodity prices increasing capital costs. But as the wind power industry adjusts to greater demand globally, these capital costs will decrease, said the EER. 

"With wind power becoming more cost-competitive it will play an important role in Europe's power generation mix going forward, especially in light of the growing risk of energy security, rising fuel costs, and climate change," according to EER senior analyst Alex Klein.


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