Wind Power Costs are Almost Exactly the Same as Natural Gas, New Study Shows

by , 03/28/14

wind power, wind energy, natural gas, gas, electricity, carbon price, carbon emissions, Wind Production Tax Credit, PTC, kWh, cost competitive

The electricity costs of wind energy and natural gas are virtually identical when the price of carbon emissions is included, according to a new study on the federal tax credit for wind power. Researchers at Syracuse University and the University of California found that the true cost of electricity for wind is 9.2 cents per kWh compared to 8.85 cents per kWh for gas. Without a pricing mechanism for carbon emissions through a carbon tax or cap-and-trade scheme, the researchers argue that the recently-expired Production Tax Credit (PTC) levels the playing field for the American wind industry.

Image via Eric B. Walker

“The true cost of electricity from wind power and natural gas are effectively indistinguishable, yet because the cost of carbon emissions is not included in the market price of gas, wind has not been a competitive form of energy use in most of the United States, without government pricing support,” said Jason Dedrick, associate professor at Syracuse University’s School of Information Studies (iSchool).

Related: DOE’s David Danielson on How America Can Win the Clean Energy Race

The study, titled “Visualizing the Production Tax Credit for Wind Energy,” used a 20 year period for its analysis — the length of a typical wind contract. Besides carbon emissions, the study also factored in the costs of wind intermittency and natural gas volatility to reach the conclusion that the true cost of wind is only .35 cents per kWh higher than gas. The current Department of Energy national average estimates for wind is 8.7 cents per kWh and 6.6 cents for gas.

The federal wind tax credit “is actually compensating for a market failure to price the future cost to society of carbon emissions. In the absence of a carbon tax, the PTC can serve as a stand-in to make the market reflect the true costs of energy,” said Greg Linden, senior research associate at the University of California, Berkeley.

Related: World’s First Airborne Wind Turbine to Bring Renewable Energy and WiFi to Alaska

The PTC has been renewed and allowed to expire several times since it was created in 1992, which has given the wind market much uncertainty over the years. President Obama’s fiscal-year 2015 budget proposal calls for permanently extending the PTC.

+ Visualizing the Production Tax Credit for Wind Energy


Lead image via Shutterstock

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  1. Jason Harris March 29, 2014 at 2:27 pm

    if I had one o those wind turbines , Pepco, Alleghany and obama could suck a fat D. I want free power and wouldn’t pay a nickel to any of them, for they do not produce wind. but the sure like to claim ownership or rights to anything. do better to stop corporations from mass pollution before you try to control the use of wind. as if they care for ourplanet- they only care for thier $$$$$$

  2. indichas March 28, 2014 at 11:42 pm

    @Sean Reynolds~ your concept of the impact on wind currents by installation of wind generators around the world is like saying too many surfers affect the ocean currents. You really need to tune into the power of nature and stop watching the Disney Channel.

  3. phillip newmarch March 28, 2014 at 7:42 pm

    “As wind travels over anything with water in it, it evaporates small amounts of water”
    Err … no! It is not ‘wind’ that brings evaporation about, but ‘air’. And it needs to be dry air. Wind, at low velocity, certainly assists by moving the moist air (that has already absorbed some evaporation) away.
    This has nothing to do with the operation of a wind turbine, which cannot possibly slow the wind down significantly, even if it introduces some local turbulence.
    In any event the cooling effect of evaporation is always exactly balanced by the warming effect of condensation.

  4. archonic March 28, 2014 at 6:58 pm

    @Sean You are so horrifically misinformed, it’s beyond humourous and is instead just depressing. Do literally ANY amount of research and you will find your views are complete ass backwards.

  5. Sean Reynolds March 28, 2014 at 3:28 pm

    If the largest threat to humanity in the next 100 years is Global Warming, then Wind Energy is the wrong approach.

    See everything has a purpose, and the purpose of wind is to cool the Earth. As wind travels over anything with water in it, it evaporates small amounts of water. This process naturally cools the object that water came from. This is how our bodies regulate temperature and this is also one way the Earth regulates temperature.

    Even if we can never fully extract all the kinetic energy out of the wind, to the degree to which we can extract energy is the degree which we warm the Earth even further.

    If we want a carbon neutral energy source then we need to be using more Nuclear. We could be turning the Cold-War era weapons into the energy sources of tomorrow.

    If we want a renewable energy resource that is carbon neutral we should invest more in Carbon-Nano-Tube Solar cells for converting the sun’s emf directly in to AC Power. We should also consider Geothermal. We know how to generate electricity from temperature differentials. We need to use Geothermal Power Plants at volcano’s, geysers, and hot-springs.

    I support a carbon tax, but I don’t support subsidizing failed technologies which have yet another negative impact. It’s Global Warming that is the enemy, not Carbon Dioxide. We can start fixing Global Warming now.

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