Many blogs ago, I referenced research being done at the Berkeley Lab, covering the economic feasibility of a net carbon negative future. Recently, the Berkeley Lab is back on my radar with another economic study. Again, we are looking at the economic feasibility of shifting to an ever-greener energy grid. The most recent report came out of a survey of 140 of the world’s foremost experts in wind power who predict that the cost of generating electricity through wind harvesting will decrease by 17%-35% by 2035 and by 37%-49% by 2050. As technology advances turbines are expected to become more efficient and operating costs per kilowatt hour are expected to decrease as well. The belief of these experts is that cost will be driven down in both on-shore and off-shore wind. I think this is extremely promising as it helps ensure that costs will not be a prohibitive factor to expanding our wind energy production wherever strong winds may be found.
One of the key drivers in cost per kilowatt hour (KWh) reduction of energy production is the efficiency of wind turbines. Over the last decade wind turbines have been already become more efficient with a 42% increase in wind turbine capacity since 2010. This increase is primarily driven by an increase in wind turbine size. Being able to sweep a larger area, turbines are able to capture more of the kinetic energy created by the wind around them with each rotation; turbine size has roughly doubled since 2009. This increase in efficiency has caused both installment costs to plummet as well as costs per KWh. Since 2010, the cost to install wind turbines has fallen by over 40% with the costs currently in the $700-$850 per kw of capacity range. This has translated to a drop from 7¢ per KWh down to 2¢ per KWh. For comparison, the average cost per KWh in the United States is 13.31¢ for a residential user. One final price drop I want to touch on is the levelized cost of wind power. For a quick refresher, I discussed what levelized costs of energy are here. Well, the levelized cost of wind has also dropped from upwards of $90 per MWh to the around $35 per MWh.
But one thing to consider about this Berkeley “study” to consider is that it is just a survey, so how reliable can these percentages truly be. The fact of the matter is that we really don’t know what the likelihood is of these predictions being accurate is. However, if we take historical predictions and test them against where we are today, this survey is probably inaccurate, and that’s a good thing. Over the last decade, the decrease in costs and increases in efficiency described above have exceeded any predictions made about wind power capacity and cost. Technology progress occurs at an exponential rate. Given our current trends we can predict certain trajectories, and as the pace of progress continues to build on itself, we will see that we are wrong more often than not, and in the best way possible. You heard it here first, I am optimistic that we will exceed the price reductions forecast here by the year 2050, if not by 2035.
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