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Are Wind Costs Falling?
Jamais Cascio, 19 Dec 05

Deng Yuanchang, deputy director of the Wind Resource Research Center at Sun Yat-sen University, claims in this article in the San Jose Mercury News that "With the development of wind turbine technology in China, the price is already falling worldwide. The price has come down about 20 percent." Unfortunately, the article doesn't follow up on this remarkable assertion.

I could see reasonable arguments both supporting and refuting this claim; there are more companies making wind turbines using better/cheaper technologies, but there's also a great deal more demand. My initial search for confirmation didn't dig up any other pieces talking about a 20% drop in wind power technology prices, and I don't have ready access to historical cost trends. I do, however, know that many WC readers have been looking at the wind industry for awhile, so let me throw the question to you folks: are the costs of wind power systems falling? And the 20% claim -- presumably over just the last decade or less, as China wasn't aggressively pushing wind until recently -- is this true?

(Found via Alternative Energy ~ Renewable Energy blog)

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Comments

It might simply be labor costs.


Posted by: odograph on 19 Dec 05

A few years back, the rule of thumb was $1M per MW installed. Is this still true? Or are we down to $800k/MW?


Posted by: JN2 on 19 Dec 05

"The technology has improved dramatically in the last few years. The cost has declined and the reliability has increased. That has a big factor on the economics," Maritime Electric president Jim Lea says.

That's from recent news coming out of Prince Edward Island:
Maritime Electric goes for wind energy
.

Earth-policy.org had an article about this back in 2003. Wind Power Set to Become World's Leading Energy Source, and the accompanying data is interesting.

When I have time, I'll figure out who that group is that is spending CAD$60 million on turbines, and spending an extra $30 for transmission capacity. PEI is now set to surpass its 15% renewable target by 2010.


Posted by: Daniel Haran on 19 Dec 05

Even if the market price hasn't fallen yet because of scarcity, if the production price has dropped, it's a step in the right direction.


Posted by: Michael G. Richard on 19 Dec 05

Don't know if prices are falling but installations are definitely increasing...

U.S. Wind Industry to Break Installation Records,
Expand by More Than 35% in 2005

http://www.awea.org/news/US_wind_industry_to_break_installation_records_110305.html

There is also a good map of upcoming wind installations in this article.


Posted by: Joe Deely on 19 Dec 05

Wind power - the next industry to have its China shock?


Posted by: Alex on 20 Dec 05

Indeed there are now Chinese manufacturers of wind turbines, primarily aimed at the local market, either coastal (the recent riots near Hong Kong that ended in the deaths of 20+ people involved in part the location of a wind farm) or plains, such as the vast steppes near Mongolia. The cost of labour is low, of course, and the components that make up a turbine are not more high tech than any other durable good.

Indeed turbine production is becoming a durable good with production meeting economy of scale manufacturing based on a reference design, which means that a single design for turbines will eventually dominate due to its price point.

Smaller manufacturers and ones used to high margins to pay for development costs may get squeezed out once this happens.


Posted by: Michael Slavitch on 20 Dec 05

Its a combo of mass production and changes in tech. Now adays you simply have tech that allows moving objects to last alot longer then in 1980 or even 1995. Also The bigger the turbine the better and big designs have come.

Also the ability to cheaply make massive parts and ship them is recent.

Finaly power management tech has changed alot and the grid can handle wind power much better then before. Alot was wasted before due to power management needs that ate up alot of the energy.


Posted by: wintermane on 20 Dec 05

Thanks, folks -- lots of interesting info here.

To be clear, I understand why this might be happening, and I would not be surprised if there was a significant drop *in China*. What I'm looking for is confirmation that wind power tech prices have dropped globally by 20% or so in recent years.


Posted by: Jamais Cascio on 20 Dec 05

The price of a windmill and more importantly maintaining it has dropped alot more then 20% in recent years.


Posted by: wintermane on 20 Dec 05



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