Wind power cheaper than conventional electricity sources, new study shows

» By | Published 18 May 2012

Wind power is cheaper than conventional electricity sources in both Kenya and Nicaragua, a new study from a Swiss technology institute has found.

Conducted by research scientists from ETH-Zurich’s Department of Management, Technology and Economics and published in the monthly journal Nature Climate Change, the study also found that wind energy was cheaper than solar in Brazil, Egypt, India, Kenya, Nicaragua and Thailand.

The study is linked to an agreement made at the 2010 climate change conference in Cancun, in which nations agreed to channel money into southern countries in order to lessen the impact of climate change. The study looked into the best ways to spend money on protecting the climate.

“Our results unveil large cost variations across specific technology–country combinations and show to what extent fossil-fuel subsidies can negatively affect the competitiveness of renewable-energy technologies,” according to an abstract of the study.

Writing about the study in the newsletter ETH Life, Fabio Bergamin said many developing countries should turn to wind power plants because of the lower costs.

Bergamin also said the ETH scientists compared what it would cost to generate a tenth of the electricity demand with wind power or photovoltaics for the six countries. “The result,” he said, “with one franc or dollar of funding, you can produce more electricity in all the countries examined – Brazil, Egypt, India, Kenya, Nicaragua and Thailand – if the money is invested in wind power plants.”

He said the researchers also compared their calculations for wind and solar power in the individual countries with the present electricity mix and found, in Kenya and Nicaragua, that producing electricity with wind power plants would even be cheaper than it is now:

“As the study reveals, not only would a green switch make sense there for climate reasons, but also purely economic ones,” Bergamin said.

The study was published a month after a US report by the Michigan Public Service Commission (MPRS) to the state legislature found that electricity from wind energy and other renewables is close to one-third cheaper than electricity from a new coal-fired plant.

The report found that average costs over the life cycle of renewable energy systems equalled €69.5 per megawatt-hour (MWh) while the cost for a new coal fired power plant totalled €101 per MWh.

In addition, the Court of Auditors in France published a report in March 2012 that revealed the cost of producing nuclear energy is set to surge in France as old plants need updating and new safety standards put in place. Nuclear will require significant investment in the short and medium term at a rate of at least double the current level of investment, the Court said.

EWEA has developed an online tool that instantly calculates electricity costs, including any fuel and carbon risks, for gas, coal, nuclear, onshore and offshore wind. Users can type in their own assumptions on, for example, coal and gas prices, future carbon costs, capital costs and availability.

By choosing to compare, for example, onshore wind and coal for the year 2010 and projected costs for 2020, the tool shows that in 2010 wind cost €65.7 per MWh, compared to coal’s €69.4, and by 2020 the gap should be even wider – €58.2 for wind and €82.5 for coal.

Meanwhile, the tool shows that nuclear will cost €102 /MWh in 2020 – the average price across Europe taking into account the fact that nuclear plants take a long time to build which pushes up the initial capital cost. Onshore wind energy meanwhile will see a price drop by 2020 falling to €58 /MWh and offshore wind will cost €75 /MWh.




Categories: Energy security