According to a report released by the US Department of Energy (DOE) and prepared by the Lawrence Berkeley National Laboratory (Berkeley Lab), wind power in the US is seeing growth, solid performance and attractive prices.
With the average cost for newly built projects being less than $40 per megawatt-hour (MWh), the cost of wind is far less than its grid-system, health and climate value. “Wind power prices – especially in the central United States – remain attractive despite ongoing supply chain and inflationary pressures,” said ryan wisera senior scientist at Berkeley Lab energy technology sector, “The economy gets even better when you consider the health and climate benefits of wind power,” he added.
“Wind power prices – especially in the central United States – remain attractive despite ongoing supply chain and inflationary pressures.”
– Ryan Wiser
Although 2022 was a relatively slow year for new wind power deployments, the Inflation Reduction Act promises new market dynamics in the years to come. Key Findings from the DOE’s Annual »Land-Based Wind Market Report” include the following:
• Wind comprises an increasing share of electricity. US wind power deployment is expected to total 8.5 gigawatts (GW) in 2022, representing an investment of $12 billion. Wind power contributed more than 10% of the country’s electricity supply and more than 38% of the South-West power pool. A record-high 300 GW of wind is seeking transmission interconnection.
• Wind turbines are getting bigger as technology advances. Plant performance has improved over the past decades by featuring larger turbines mounted on higher towers and longer blades. In 2012, only 1% of turbines had rotors 115 m in diameter or larger, while in 2022 98% of newly installed turbines would have such rotors. Proposed projects indicate that the total turbine height will continue to increase.
• Wind power prices have risen but remain attractive to buyers. Wind power purchase agreement prices have been increasing since about 2018, recently ranging from less than $20/MW to more than $40/MW depending on region and other details. These prices, which are possible in part because of federal tax support, are similar to recent solar sales prices and the projected future fuel costs of gas-powered generation.
• Grid-system price increases of wind in many markets to 2022. The price of wind sold in wholesale electricity markets is affected by the location of wind plants, their hourly output profiles, and how those characteristics relate to real-time electricity prices and capacity markets. The market value of wind generally increased in 2022 due to increases in natural gas and wholesale electricity prices. The highest wind values were in New England and California (above $75/MW), the lowest values were in the Southwest Power Pool ($18/MW).
• The average leveled cost of wind power was $32/MW. Stratified cost varies by time and geography. The national average for wind plants built in 2022 was $32/MW, which is less than the concentration of new wind projects in the country’s lowest-cost wind regions: Texas and the central part of the country. (The cost estimates do not count the impact of federal tax incentives for wind.)
• In 2022 the health and climate benefits of wind far outweigh the scaled costs of wind. Wind generation reduces emissions of carbon dioxide, nitrogen oxides and sulfur dioxide in the power sector. These reductions, in turn, provide public health and climate benefits that vary regionally, but overall average economically at $135/MW in 2022.
• The domestic supply chain started 2022 with a downturn, but the passage of the Inflation Reduction Act has led to renewed optimism. Although domestic manufacturing of towers and nacelles was strong in 2022, blade manufacturing has declined in recent years. The Inflation Reduction Act includes, for the first time, a production-based tax credit for domestic manufacturing of major wind components such as nacelles, towers and blades; It also extends tax credits for wind deployment, including a new 10% bonus for projects that meet domestic content requirements. As a result, there have been at least eleven announcements of manufacturing facilities that plan to open, reopen, or expand to serve the land-based wind industry.
• Energy analysts anticipate wind deployment to increase with incentives in the Inflation Reduction Act. The Inflation Reduction Act provides a long-term extension of the tax credit for wind power as well as opportunities for wind plants to earn two 10 percent bonus credits. The average wind deployment forecast for 2026 among analysts is 18 GW, a significant increase from the 11 GW 2026 forecast a year ago (before the Inflation Reduction Act).
Berkeley Lab’s contribution to this report was funded by the US Department of Energy’s Office of Wind Energy Technology.
full Land-Based Wind Market Report: 2023 EditionA presentation slide deck summarizing the report, several interactive data visualizations, and an Excel workbook containing the data presented in the report can be downloaded here windreport.lbl.gov, Companion reports on offshore wind and distributed wind are also available from the Department of Energy.
The US Department of Energy release on this study is available here energy.gov/windreport,
Founded in 1931 with the belief that the greatest scientific challenges are best solved by teams. Lawrence Berkeley National Laboratory And its scientists have been awarded 14 Nobel Prizes. Today, Berkeley Lab researchers develop sustainable energy and environmental solutions, create useful new materials, push the boundaries of computing, and probe the mysteries of life, matter, and the universe. Scientists around the world rely on the Lab’s facilities for their own investigative science. Berkeley Lab is a multiprogram national laboratory managed by the University of California, Berkeley for the US Department of Energy’s Office of Science.
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