The average price for wind power purchase agreements (PPAs) negotiated in the US fell to as low as USD 0.0235 (EUR 0.021) per kWh in 2014 from nearly USD 0.07/kWh in 2009.
The record-low wind power pricing on the US market was made possible by the declining wind turbine prices and installed project costs, and by improvements in expected capacity factors, according to a new report by the Lawrence Berkeley National Laboratory (Berkeley Lab).
“The continued decline in average wind prices, along with a bit of a rebound in wholesale power prices, put wind below the bottom of the range of nationwide wholesale power prices in 2014,” says the Wind Technologies Market Report.
Wind turbine prices have dropped by between 20% and 40% since 2008. In 2014 wind farms were built in the US at an average installed cost of USD 1,710 per kW, which is a decline of nearly USD 600/kW from the peak in 2009-2010. The average capacity of wind turbines installed in the country is also growing and capacity factors are going higher.
Wind power installations in the US rebounded in 2014, when total of USD 8.3 billion were spent on 4.9 GW of new capacity. This brought the country’s cumulative to nearly 66 GW, with wind meeting 4.9% of end-use power demand in an average year.
According to the report, utility-scale turbines with larger rotors tailored for lower wind speeds have been increasingly deployed across the US last year. When compared to wind in 1998-99, the average nameplate capacity of turbines deployed in the country has jumped by 172% to 1.9 MW in 2014. The average turbine hub height and rotor diameter have increased by 48% and by 108%, respectively.
Wind sector employment in the US grew to 73,000 in 2014 from 50,500 in 2013, the report shows. For recently installed wind parks, domestic content is over 90% for nacelle assembly, about 70%-80% for towers, and 45%-65% for blades and hubs (45-65%). Still, local content for most components inside the nacelle is much lower at below 20%, Berkeley Lab has calculated.
The report points out that far more domestic manufacturing facilities closed in 2014 than opened. “With an uncertain domestic market after 2016, some manufacturers have been hesitant to commit additional long-term resources to the US market.”