How effective are wind turbines compared to other sources of energy?

Last update: July 10, 2013
One of the things that anti-wind campaigners say about wind energy is that it’s ineffective and wouldn’t exist without subsidies. What’s the reality?

Short Answer:

Wind turbines are already at 5-7 cents per kWH or grid parity in the best sites in the US and the majority of installations in 2016 are expected to be at grid parity. Presently, newly built wind energy is cheaper than newly built generation of any type except natural gas. Costs have dropped 14% for every doubling of installed capacity over the past 30 years. Projections are for another 20-30% drop over the next 20 years before levelling off.

Long Answer:

What do the best studies say?

Recent studies by the Lawrence Berkeley National Laboratory (LBNL) and a joint Queens University / Michigan Technical University show that both solar and wind are at or better than grid parity in the best sites, with wind having seen the most significant movement to a cost of 3 – 6 cents per kwh, below that of natural gas. [2]. [3], [4], [5]

This is due dominantly to massive and relatively uncelebrated increases in wind capacity factors in all wind resource categories combined with significant turbine cost reductions in the past two years.


To translate, while critics claim 20%-30% capacity factors, real capacity factors are in the 35%-47% range.

Research published [in November 2011] by Bloomberg New Energy Finance (BNEF) said that the best wind farms in the world already produce power as economically as coal, gas and nuclear generators, and predicts a 12 per cent drop in price over the next five years.

As manufacturing, operations and maintenance costs have dropped, the cost of energy before any subsidies or support mechanisms produced from onshore wind turbines has fallen by 14 per cent for every doubling of installed capacity between 1984 and 2011, BNEF said.

This represents a real-term decrease from €200 per megawatt hour (MWh) to €52/MWh, only €6/MWh more than the average cost of a combined-cycle gas turbine. BNEF said that, if the cost of gas includes the cost or carbon emitted, wind would already be at grid parity. [7]

When the California Energy Commission published “Comparative Costs Of California Central Station Electricity Generation” in 2009 [1], the full-lifecycle analysis of costs including regulatory and zoning costs, insurance costs, construction costs, financing costs, maintenance costs and fuel costs over 20 years found that wind energy was very competitive with most forms of energy without any specific subsidies.

This comparative advantage is projected to increase by 2018 as wind’s advantages of zero fuel run costs contrast with increasing prices and more limited siting options for most other forms of energy.

Screen Shot 2013-02-18 at 8.01.43 AM

Subsidies and regulation favouring wind energy are merely leveling the playing field sufficiently that its inherent efficiencies become viable in a conservative industry with strong systemic biases toward traditional energy sources.

The International Energy Agency, the most trusted source in energy, agrees. Their 2012 World Energy Outlook shows that new build of wind energy generation is cheaper than new built coal, nuclear and hydro generation, in fact cheaper than anything except new natural gas generation. [12]

What’s really happening?

This is not just theoretical, by the way.  Wind generation proposals won 80% of the contracts at a December 2011 Brazilian power auction, beating gas and hydro proposals based on an average cost of power of 5.5 cents per kwh for almost a gigawatt of generating capacity across 39 projects. [6]

What other factors are in play?

Another key factor is that in many jurisdictions, markets for energy favour energy sources with low marginal costs such as wind, which is close to a zero marginal cost when the wind is blowing.  This depresses the effective rate that everyone is paid. This is known as the merit order effect.  In one study, consumers in the midwestern USA might see a $63-$200 annual reduction in their electricity bills due to market forces.[8]

In Australia, this is saving consumer money as well, $7 per year with very little penetration of wind energy.[9]

What does it look like in the longer term?

The IEA, NREL and LBNL collaborated on a study to project long term cost of wind energy and published their report in May 2012.  Median projections range from 20-30% further reduction by 2030.  This puts wind in the 4-5 cents per kWh range. [11]

Screen Shot 2013-02-18 at 8.14.51 AM

Wind is a very effective part of our energy mix today and will only become more effective compared to alternatives.



  1. MIT’s Dr. Paul Joskow points out that wind at, say, $40-50/MWh that is produced primarily at times of low demand-spring, fall and nighttime-is a bad value as the market is typically offering much less than that.

    1. It’s an interesting premise, and I’m not qualified to assess Dr. Joskow’s research and assertions in detail. He’s deep in this space.

      However, $40-$50/MWh is 4-5 cents per KWh. This is cheaper than new coal generation, new hydro, new nuclear and in fact is cheaper than anything except new shale gas which is artificially cheap right now and already seeing people exiting the market. That’s grid parity or below, so it’s hard to call it uneconomic.

      It’s also worth noting that Dr. Joskow’s arguments assume that there are no negative externalities associated with fossil fuel generation that systemic decision making should account for. In the case of coal, the estimates range from 17.8 cents per KWh to 45 cents per KWh, depending on the economic damage accorded to global warming. Natural gas, while much less polluting otherwise, still produces 50 times the CO2e of wind energy per MWh over its full lifecycle. Estimates for negative externalities are in the 5-10 cents per KWh range.

      He also ignores positive externalities of distributed generation, specifically additional revenue streams for rural areas that also happen to produce our food. The additional revenue from wind generation can make a farm economic and a region desirable, instead of seeing declines in rural fortunes. We don’t need many people to live in the country, but we do need some. Distributed generation such as wind helps with that.

      Finally, Dr. Joskow is not a fan of the merit order effect, which is a market mechanism used in many energy grids world wide including the USA and Australia. For consumers, the value proposition is clear: sources of energy with no incremental fuel costs set the price and wind energy always trumps coal and shale gas generation, displacing them. As peaking coal and shale are typically more expensive in addition to more polluting, the populace of areas with lots of wind energy win twice, once with lower electrical bills and again with cleaner air.

      In the USA, there’s a clear correlation between states with low consumer electricity prices and lots of wind energy.

      Dr. Joskow is thinking about big issues, but he’s not addressing all of the variables, and it’s likely he would be the first to admit it. He’s doing deep academic work on a slice of the grid, not saying that one form of generation is better than another. And he’s right to point out the weaknesses of dominant forms of assessment of energy types, but it’s challenging to assume that this means that there is a better alternative.

      1. Tom Tanton · ·

        Actually, I think Mr. Martis is correct in his assertion about ‘value.’ Keep in mind that electricity is measured in both energy and capacity. While the price for wind is close to the price of other options, wind has near zero capacity and thus is worth much less. Price does not equal value. Also take into account grid impacts and diminished efficiency of plants forced to balance the erratic nature of wind and you’ll find it’s not a good deal. Lots of wind does not equal low cost…check EIA website for proof.

      2. Oddly, real world grid operators world wide disagree with you. That’s likely why wind energy is the fastest growing utility scale source of generation in the world, on track to achieve greater capacity than nuclear in the next couple of years.

        What grid managers say is that a MWh of generated wind is pretty much equal to a MWh generated from any other source. There are just differences in management and markets.

  2. “However, $40-$50/MWh is 4-5 cents per KWh. This is cheaper than new coal generation, new hydro, new nuclear and in fact is cheaper than anything except new shale gas which is artificially cheap right now and already seeing people exiting the market. That’s grid parity or below, so it’s hard to call it uneconomic.”

    Actually, it is perfectly simple to do so and EIA already has:

    “The duty cycle for intermittent renewable resources, wind and solar, is not operator controlled, but dependent on the weather or solar cycle (that is, sunrise/sunset) and so will not necessarily correspond to operator dispatched duty cycles. As a result, their levelized costs are not directly comparable to
    those for other technologies (even where the average annual capacity factor may be similar)
    and therefore are shown in separate sections within the table.”

    Likewise Glenn Schleede:

    “The true value of a kilowatt‐hour (kWh) of electricity depends on when it is produced.
    Specifically, a kWh of electricity produced during periods of high or peak electricity demand
    has much higher value than a kWh produced when demand is low (e.g., during nighttime
    hours in most areas of the US).

    This, too, is a critically important fact when attempting to compare either cost or value of
    electricity from wind turbines with electricity from reliable, dispatchable generating units.
    The fact is that electricity from wind turbines has a lower value per kWh because that
    electricity is not only intermittent, volatile, largely unpredictable and unreliable, but it is also
    most likely to be produced at night and in colder months when wind speeds are adequate to
    spin the blades, not at times of high or peak electricity demand.”

    So the eminent Mr. Schleede, Dr. Joskow and the EIA concur: the value of a kWh is dependent upon time and place of delivery. Since wind cannot guarantee time and place delivery that is commensurate to demand, LCOE comparisons between sources that can make that guarantee and those that cannot must be abandoned because they are devoid of economic meaning.

    In the name of scientific integrity, will you follow suit?

    1. No, actually. What they are calling out is an edge condition that must be addressed over time and must be accounted for in grid management strategies.

      Saying that LCOE’s must be abandoned as a result is like saying that Newton’s Law of Universal Gravitation must be abandoned in whole as a result of Einstein’s hypothesis, subsequently proven, that there are conditions under which Newton’s basic formula and calculations do not hold. I personally find that it works just fine in 100% of the situations in which I have to account for the effects of gravity, and perhaps 0.00001% of the human race has to account for the edge condition in perhaps 0.0001% of the situations where they consider gravity.

      LCOE’s are a very effective mechanism for comparing generation costs 99%+ of the time. That’s adequate for real world conditions, hence the EIA’s continued dependence on them.

      Joskow’s work may result in an improvement to LCOE’s or a special condition calculation that extends them. Time will tell. In the meantime, it provides an indication to grid professionals not to treat LCOE’s as gospel, which none of them were anyway. They are one measuring stick, and a very useful one.

      My apologies, but if your sole interest is in having me agree that LCOE’s aren’t useful, I’m afraid I won’t be bothering to respond any more. They work just fine in the real world and are producing very productive and useful changes in energy mixes world wide. Thank you for the references and comments.

  3. Tom Tanton · · Reply

    Mr. Barnard, actually every grid manager I’ve worked with, worldwide (as a regulator first, later as a technical consultant; forty years total) do NOT agree that a MWH of one sort is always equal to a MWH of another sort. If that were the case why would they be signing contracts for capacity only, for balancing? LCOE are effective in comparing cost ONLY if the products are comparable. In this instance they are not. Besides, LCOE are an artifact of the regulatory compact between natural monopolies and regulators, but have limited (not useless) application in competitive markets because of the value aspect. We have a mixed market (partly regulated, partly ((constrained)) competition.) But until you understand how grids are actually operated, and why wind is growing so fast (hint: mandates and subsidies) methinks you have some work left.

    1. My words were that a MWh is pretty much a MWh. Your words are that they are not always equal.

      I would say that those are roughly equivalent statements. I agree completely that in the edge conditions, secondary characteristics of the generation become important. However, the majority of the time, they aren’t and the system works very effectively with a variety of different sources.

      You have earlier chosen to say that “wind has near zero capacity” which is an unsupportable and extreme position, so your perspective is likely different than grid managers or mine. If you are choosing an absolutist position — and note that I’ve accepted your comments thus far without references –, please understand that I likely won’t bother accepting further comments or responding. This will have become an unproductive discussion regarding a nuanced and complex space.

      1. Tom Tanton · ·

        Mr. Bernard, I refer you to the PJM site where they describe their capacity crediting process…currently circa 10% actually one of the highest of domestic control areas; CaISO data shows on peak contribution historically has averaged <5%; other areas are at or near zero. I'd provide links, but your commenting protocols hold off links. I have to disagree that this is somehow a 'nuanced' edge phenomenon…the very basic first rule of grids is to have adequate capacity (in MW) reliably dispatchable to meet load. I agree it's a complex space, what with maintaining frequency and voltage, but no grid maintains without capacity (not just energy.)

      2. My commenting protocols only require links to credible sources. Please feel free to provide links and I will assess them. It doesn’t seem as if you are referring to or other AGW denialist sites so they are likely fine.

  4. […] wind speed, WINDPOWER Program, [12] How effective are wind turbines compared to other sources of energy? [13] Governmental incentives for renewables are necessary and provide great value-for-money […]

  5. […] terms, anyway. Overpriced. Inefficient. Unreliable. fAiL Too bad the facts say otherwise! How effective are wind turbines compared to other sources of energy? | barnard on wind __________________ […]

  6. I am late to this party but the CAiso site has added additional features to understand the renewables contribution. It is fascinating. This link shows how nicely wind and solar can play together –

    There is fodder for the anti-renewables crowd as well. However, thankfully, CA is forward thinking. They loo forward to new solutions rather than nostalgically looking back at 100 year old approaches. They are expanding their transmission grid for added access to flexible hydro in the northwest, and aggregation of intermittent sources thus which creates a much smoother behavior. They are also creating a market for storage, which their economic engine (silicon valley) is now setting its sights on. And they are developing smart grid.

    The biggest challenge they face is peaking demand as the sun goes down on the days that the wind is not taking over. However, there are a number of ways to mitigate this. As solar drops off what are the loads? Lighting, Dishwashers, refrigeration and AC. Lights and dishwashers increase the strain on AC and refrigeration by adding heat to the interior of load sights. LEDs are significantly reducing the lighting load and they are the most efficient lighting mode and they are expected to double in efficiency. TOU metering would incentivise people to do their dish-washing later at night. These two measures are two-fers because by reducing waste heat in the home, air conditioning and refrigeration loads are reduced as well.

Be nice, be respectful, be relevant.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Get every new post delivered to your Inbox.

Join 1,229 other followers

%d bloggers like this: