Wind energy continues to see strong growth, solid results and attractive prices in the US, according to a report published by the US Department of Energy (DOE) and prepared by the Lawrence Berkeley National Laboratory (Berkeley Lab). With break-even costs of just over $30 per megawatt-hour (MWh) for new-build projects, the cost of wind is well below the grid, health and climate benefits.
“Wind power prices — particularly in the central United States and supported by federal tax incentives — remain low even as supply chain pressures continue, with utilities and corporate buyers choosing wind as a low-cost option,” said Ryan Weiser, senior scientist at the Zone for Berkeley Lab Energy Technologies. “Looking at the health and climate benefits of wind power makes the economics even better,” he added.
Key findings from DOE’s annual Onshore Wind Market Report include the following:
• Wind accounts for a growing share of electricity supply. US wind power capacity grew at a strong pace in 2021, with 13.4 gigawatts (GW) of new capacity added representing $20 billion in investment and 32% of all US capacity additions. Wind power generation has grown to more than 9% of the country’s electricity supply. At least 247 GW of wind power is seeking access to the transmission system; 77 GW of this capacity are offshore wind farms and 19 GW are hybrid plants that combine wind with energy storage or solar.
• The efficiency of wind projects has increased over the decades. The average capacity factor (a measure of project completion) among recently completed projects was nearly 40%, significantly higher than projects built earlier. The highest capacity ratios are observed in the interior of the country.
• Turbines continue to increase. The plant’s improved performance is driven by larger turbines mounted on taller towers and with longer blades. In 2011, no turbines used blades with a diameter of 115 meters or larger, but in 2021, 89% of newly installed turbines had such rotors. The proposed designs show that the overall height of the turbine will continue to increase.
• Low Wind turbine pricing has reduced the cost of an installed project over the past decade. Wind turbine prices averaged $800 to $950/kilowatt (kW) in 2021, up 5% to 10% from the previous year, but significantly lower than 2010. Average installed cost of wind projects in 2021 .was $1,500/kW, down less than 40% from the 2010 peak, though stable in recent years. The lowest costs were found in Texas.
• Wind energy prices have risen but remain low, around $20/MWh in the country’s interior “wind belt”. After reaching $75/MWh for power purchase agreements signed in 2009, the average national wind price has fallen – although supply chain pressures have driven prices higher in recent years. In the country’s domestic “wind belt”, recent prices are around $20/MWh. In the West and East prices average over $30/MWh. These prices, made possible in part by federal tax support, fall below projected future fuel costs for gas generation.
• Wind energy prices are often attractive compared to the market value of the wind network. The value of wind energy sold in wholesale electricity markets is affected by the location of wind farms, their hourly power profiles and how these characteristics correlate with real-time electricity prices and capacity markets. The market value of wind increased in 2021 and ranged regionally from under $20/MWh to over $40/MWh, a range roughly consistent with recent wind power prices.
• The average levelized cost of wind power is $32/MWh for plants built in 2021. Levelized costs vary by time and geography, but the national average was $32/MWh in 2021 – a significant decline historically, though consistent with the previous three years. (Cost estimates do not account for the effect of federal tax incentives for wind.)
• The health and climate benefits of wind in 2021 were greater than its value on the grid, and the combination of the three far exceeds the current levelized costs of wind. Wind generation reduces energy sector emissions of carbon dioxide, nitrogen oxides and sulfur dioxide. These reductions in turn provide public health and climate benefits that vary by region, but collectively are economically valued at an average of over $90/MWh of wind for plants built in 2021.
Berkeley Lab’s contribution to this report was funded by the US Department of Energy’s Office of Wind Energy Technology.
The full Onshore Wind Market Report: 2022 Edition, a presentation slide that summarizes the report, several interactive data visualizations, and an Excel workbook that contains the data presented in the report can be downloaded at windreport.lbl.gov. Companion reports on offshore wind and distributed wind are also available from the Department of Energy.
The US Department of Energy’s announcement on this study is available at 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 won 14 Nobel Prizes. Today, Berkeley Lab researchers develop sustainable energy and environmental solutions, create useful new materials, push the boundaries of computing, and explore the mysteries of life, matter, and the universe. Scientists from all over the world rely on the laboratory’s facilities for their own scientific discoveries. Berkeley Lab is a multi-program national laboratory operated by the University of California for the US Department of Energy’s Office of Science.
DOE’s Office of Science is the largest supporter of basic research in the physical sciences in the United States and works to address some of the most pressing challenges of our time. For more information, please visit energy.gov/science.