Initial investment accounts for the majority of solar PV and wind power plant generation costs, as operations and maintenance expenditures are low. In late 2020, the prices of major inputs such as steel, copper, aluminium and polysilicon began to rise sharply, as did freight and land transport costs, due to supply chain challenges and growing demand during the post Covid-19 global economic rebound. Show
At its highest point in 2022, the average monthly price of polysilicon – a crucial material for crystalline silicon solar PV cell production – was four times higher than at the beginning of 2020. The price of steel, the main construction material for both utility-scale PV and onshore wind plants, increased 75% in China, 160% in the United States and 270% in Europe, while copper and aluminium became 60-80% more expensive. The highest growth was in freight rates, which rose almost sixfold. In 2022, the share of main commodities and costs associated with transportation accounted for an estimated 30-35% of overall CAPEX for utility-scale and wind projects, twice as much as in 2020. Taking the full impact of higher prices on project development costs into account, and the usual annual cost reductions from continued technological innovation, the resulting LCOE increase for 2022 is estimated at 15-20% for these technologies. In 2023, commodity prices have fallen significantly below their peaks, but they remain elevated compared with 2020. Average prices in Q1 2023 compared with January 2020 were higher by over 200% for polysilicon; by 100% for steel in the United States and Europe; and by 20-40% for aluminium, copper and freight. In many cases, commodity price changes have not yet been directly reflected by equipment manufacturers because of their supply contracts. However, many suppliers may attempt to recover their increased costs by raising prices in upcoming years, leading to higher investment costs. In addition, macroeconomic risks in the global economy – associated with rising inflation, higher interest rates and the energy crisis caused by Russia’s invasion of Ukraine – lead to a higher cost of capital, including for renewable energy projects. In real terms (i.e. excluding the impact of inflation), the weighted average cost of capital (WACC) is expected to increase in most large solar PV and wind markets, excluding China. The higher cost of capital could offset most of the cost decreases resulting from lower commodity prices and further technology innovation in the next two years. Consequently, the average LCOE for utility-scale PV and wind could be 10-15% higher in 2024 than it was in 2020. How much does a wind turbine cost in 2023? As these green energy machines are getting larger and larger, it’s no secret that they are expensive. Want to take a broader look into the industry and other things affecting wind turbine costs? See The Economics of Wind Energy in 2023 In this article, we dive into the numbers: how much does a wind turbine cost, do they actually pay for themselves over time, and is the large upfront investment worth it? Off-shore wind farms are taking off with the Biden Administration championing wind power in the United States, and all over the world, yet cost estimates for off-shore wind are more difficult to pin down than onshore wind. Is Wind Energy Getting Too Cheap?In recent years, wind turbine manufacturers like Siemens have expressed concerns that the cost of wind energy is getting too low to maintain the development and growth of the market. Rising costs, and government pricing structures present constant challenges to manufacturers. Again in May 2023, Siemens’ Tim Dawidowsky’s commented, “it’s all about cash.” Obviously, Dawidowsky would like to see European turbine makers get more money – and he’s not the only one. We reported on that comment in an Uptime Podcast episode the following week, along with other concerns about energy pricing strategies. Because different countries finance energy in vastly different ways, the industry absolutely does not enjoy a level playing field. While many European countries control energy developments outright – and other countries, like the US, has a long history of incentives and subsidy programs – it is difficult to determine actual costs, true profits and losses, and almost impossible to compare energy costs between nations. The Biden administration’s IRA (Inflation Reduction Act) has committed billions to green energy incentives. For weekly discussions on wind industry business and technology, listen to the Uptime Wind Energy Podcast here. How Much Does a Wind Turbine Cost Initially?For commercial wind turbines, the answer is millions of dollars per turbine.  Wind turbines cost a lot, and as such the investment is to be recouped over a long period of time. Turbines produce significant electricity and sell it back to local power utilities where it flows to the power grid, to be used by homes and businesses. The Breakdown of Initial Wind Turbine Costs
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Wind Turbine Maintenance CostsOnce built, maintenance is an ongoing expense.
Operation and maintenance costs can be significant, but all of these machines are long-term investments continue to (hopefully) pay for themselves over time. A wind turbine study using German data showed that these costs can be 1-2 Eurocents per kilowatt hour (kWh) produced, on average. This article claims that typical O&M cost is $42,000 – $48,000 per year in the United States, but the article also explains that some costs are decreasing as technology improves. This number climbs as the the turbine ages, which is not surprising considering the wear and tear and harsh environments these machines operate in. What Does Operation & Maintenance Consist of?Operation & maintenance (O&M) typically includes the following:
These recurring costs are not too significant, and the turbine will significantly outproduce the maintenance costs. Repairs can be a significant capacity reducer (more on this later), and lightning strikes on wind turbines can be a real problem. Though turbine blades leave the factor with a lightning protection system, often they are inadequate. Especially for offshore wind turbines–where transporting workers for repair is costly and time-consuming–additional layers of lightning protection is important. Products like segmented lightning diverters can provide additional protection from lightning strike damage to wind turbines. How Much Electricity Does a Wind Turbine Produce?We’ve covered costs, so now lets turn to the big question: how much electricity does a wind turbine generate? Wind turbines are sized in megawatts (MW), which refers to their capacity to create electricity. One megawatt = 1,000,000 watts of power. One megawatt can power about 1000 homes for a month but in reality, wind turbines don’t come close to producing their rated capacity because of changing wind speeds. Size of the Wind Turbine Affects Electricity-Producing CapacityWind turbines cost more the bigger they get, but they produce more electricity with larger nacelles and turbine blades. In its latest report on average rotor diameter size, Statistica said rotors for onshore wind turbines had risen to 129 meters (423 feet). Common commercial wind turbine sizes in megawatts:
…and they’re getting bigger! see an updated article on wind turbine costs for 2023 here Offshore wind farms choose larger wind turbines in part because of the high cost of installing them and transporting the electricity, as well as the increased efficiency they gain with consistent, faster wind speeds. It’s preferable to build one turbine rather than many smaller ones because fewer towers and ground anchoring systems have to be constructed, making everything less complicated. Wind Speed & Direction Affects “Capacity Factor” in Electric ProductionAt full wind speed, a turbine can produce at it’s full capacity. If a turbine is rated for 2.5 MW, then at peak wind speed it will crank out 2.5 MW of power. Yet, we all know that wind is never constant. Because the wind dies down, changes direction, etc., overall averages will be much lower, usually in the 30-40% range for onshore wind turbines and up to 65% (occasionally higher in rare circumstances) for offshore turbines. Biggest Wind Turbine: GE Haliade-X 12 MW TurbineThe GE Haliade-X is…insane. This enormous wind turbine is the first to offer 12 MW capacity, with blades 107m (351 feet) long and an overall footprint that reaches 260m (853 feet) into the sky. Turbines of this size are typically used offshore, where wind speeds are consistently much higher and delivering power is more complicated. Fewer, bigger turbines = easier power transport, fewer long-distance cables and a simpler overall system. If you’re curious how these turbines stay upright in the crazy waves and wind out to sea, check out this article featuring some great illustrations. How Much Money Does a Wind Turbine Produce From Electricity it Generates?Remember that a wind turbine has a maximum rated capacity (such as 4 megawatts), but it will only produce electricity at a “capacity factor” or “load factor” that is a percentage of this maximum. In the chart below, you’ll find some numbers based on the typical sale price (2019 data) of electrical power created by wind turbines. This power is sold back to the electrical grid of utility companies, and the price has been falling as turbine technology has improved. This sale of electricity is how wind turbines pay for themselves and create renewable energy. We want this power to be cheap, and it’s moving in the right direction. The goal is for turbines to produce at a higher capacity factor, which means they’re creating more electricity for the time they’re in operation. Need Lightning Protection For Your Wind Turbine?Our StrikeTape wind turbine segmented lightning diverters are the most durable, highest-performing product in the world. Wind turbine maintenance costs skyrocket when constantly damaged by lightning strikes, so protect your turbines with the best. Use StrikeTape lightning protection on your wind farm. More Wind Turbine Questions & AnswersCheck out our common wind turbine questions below, including many about wind turbine cost, specifications and more. If you have a question, leave it below and we’ll update this article with our answer! The towers on most commercial wind turbines are in the range of 200-260 feet tall. The blades, often well over 100 feet long, when counted in total height push the number well into the 300s. The Gamesa G87 model wind turbine’s blades reach a height of 399ft. Wind turbine blade tip speeds regularly range from 120-180 miles per hour, though they vary due to wind conditions. Because of their enormous size (with blades well over 100ft), they look like they’re spinning slowly, when in reality blade tip speeds are very, very fast. $1,300,000 USD per megawatt. The typical wind turbine is 2-3 MW in power, so most turbines cost in the $2-4 million dollar range. Operation and maintenance runs an additional $42,000-$48,000 per year according to research on wind turbine operational cost. See the National Renewable Energy Laboratory’s website for the most recent (December 2022) Cost of Wind Energy Review. Yes, and these smaller turbines can now cost less than $1000. Energy production will vary greatly to the size, specs and wind conditions of a person’s home, and some homes may not be suited well for a turbine at all. There’s a reason that wind farms are carefully placed in very wind, often harsh conditions–high winds occur in places people often don’t want to live. If your home doesn’t get consistent, strong wind, it may not make financial sense to install any type of wind turbine. New turbine designs are constantly being proposed and tested. Unfortunately, they sometimes do, but it’s not the largest threat to the bird population. Cats, and cell phone towers, are far more deadly to the bird population. This article sheds light on the issue: https://www.usatoday.com/story/money/business/2014/09/15/wind-turbines-kill-fewer-birds-than-cell-towers-cats/15683843/. The number can vary greatly due to factors including size, wind conditions, blade length and of course, average home energy consumption. A typical wind turbine is generally capable of powering 1000-2000 homes in one year. One megawatt of energy production capacity will power about 1000 homes, and many onshore wind turbines have a 2-3 MW capacity. The capacity factor–or load factor–is the actual power generation over time, rather than the theoretical maximum a turbine could produce. Because wind turbines can’t maintain peak production at all times (not even close) due to changing wind conditions, downtime for service, etc. – it’s important to consider capacity factor when calculating the expected power a turbine can produce over a year or more. Last updated June 8, 2023. Original article by Dan Blewett published December 20, 2021. Edited by Diane Stresing. Substantive changes since original publication date are noted below. What is the future cost of wind energy?Globally, the total installation cost of onshore wind projects would continue to decline in the next three decades with the average cost falling in the range of USD 800 to 1 350 per kilowatt (kW) by 2030 and USD 650 to 1 000/kW by 2050, compared to the global-weighted average of USD 1 497/kW in 2018. What is the cost effectiveness of wind energy?With levelized costs of just over $30 per megawatt-hour (MWh) for newly built projects, the cost of wind is well below its grid-system, health, and climate benefits. What is the estimated cost of wind power generation?$1,300,000 USD per megawatt. The typical wind turbine is 2-3 MW in power, so most turbines cost in the $2-4 million dollar range. Operation and maintenance runs an additional $42,000-$48,000 per year according to research on wind turbine operational cost. How much does a 1 kW wind turbine cost?Price Range- RS 45000 - 1300000. |
