Wind Energy is Becoming Cheaper than Electricity from Coal or Natural Gas

by Duane Nichols on August 19, 2014

Source: Dedrick, Kraemer, & Linden (2014)

New US-DOE report shows wind is becoming cheaper than natural gas

From Jim Kotcon, Energy Chair, WV Chapter, Sierra Club,  August 18, 2014

The 2013 Wind Technologies Market Report from US-DOE shows that newly-installed wind-generated electricity is, as a national average, already cheaper than electricity from coal, and, if the production tax credit (PTC) is included, is currently cheaper than gas-fired electricity.

Since the PTC expired last year, wind may have to compete with gas without subsidies, but as costs continue to fall for wind, and are likely to rise for gas, wind is likely to compete well even without subsidies in the near future (5-10 years).  Cost for wind are lowest in Interior Midwest states.  Wind resources in most of the Mid-Atlantic states are of lower quality and are unlikely to be competitive with gas in the near term.  A future cost for fossil carbon emissions will accelerate the market for wind as it is likely to further increase the costs for gas.

Bottom line, no one is investing in coal, and investments in new gas infrastructure are increasingly risky as long-term investments.  The Longview plant looked like a really good deal in 2003, but was not operational until 2011, and filed for bankruptcy in 2013.  A new gas plant proposed today is unlikely to be operational in less than 3-5 years, by which time it may be unable to compete with wind  in time to pay off its investment.

See the full report at this location, especially Figure 49.

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