Wind is commercially more competitive than photovoltaic
generation but not yet competitive enough to compete
commercially with conventional forms of generation because
it is too intermittent, hobbling...
wind with low capacity factors.
Forecasts show the levelized cost of wind power falling by
20%–30% from current levels by 2030, making it nearly
competitive with other forms of generation (Figure 2.3.2).
The levelized cost is determined considering all operational
costs, using a discount rate to spread the capital and financing
cost over the life of the project, and including a reasonable
return on investment.
If coal and gas prices were to escalate over this time frame,
the relative economics of wind would improve accordingly.
Challenges remain, however, to integrating this intermittent
resource into the power grid. These challenges are complicated
by wind resources’ often being most bountiful in locations
distant from demand centers, requiring lengthy connections
with power grids.
In sum, wind power has numerous advantages over
conventional power. Renewable resources are naturally
available, so the primary energy resource costs nothing. Wind
is virtually free of GHG emissions and emits no other air
pollutants. Yet the prospects of wind power becoming cost
effective within the forecast horizon is uncertain. If wind
technologies are further developed at an accelerated pace, the
day they become cost competitive can be brought forward.
Small wind turbines are available that can provide electricity
to small communities in remote locations cost-effectively
because the locale makes other options expensive. They can
thus help expand access to energy, but making it affordable to
poor households requires public financing. As wind turbines require regular maintenance, this option also requires skilled maintenance staff.
Source: Ross, forthcoming.
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