Wind power has emerged as a competitive generation option in Europe, to be considered alongside more conventional power fueled by coal and natural gas, according to a new briefing from Emerging Energy Research (EER).
"Wind energy is now in a range that is cost competitive with power from new conventional power plants. Most importantly, there is no fuel cost, and, therefore, no fuel risk, associated with wind power," according to EER research director Keith Hays.
In addition, as Europe considers moving toward a stricter carbon management regime, wind and other renewable energy technologies will become more competitive. Under one scenario, EER's briefing compares costs of generation under a carbon penalty of €30 per metric tonne. In this scenario, the cost of energy production from land-based wind turbines would be well below the cost of natural gas and coal plants at today's levels.
EER's analysis on the comparative costs of energy, conducted on a Euro/MWh basis, is based on estimates of the cost of building a new conventional generation facility versus a new wind power plant in Continental Europe.
Fuel prices will be the single most critical factor contributing to the cost of electricity from natural gas plants, according to EER. Increased commodity prices and more advanced NOx control systems are adding to the investment costs of newer facilities. New build coal in Europe must meet an EU directive that requires Flue Gas Desulphurization, increasing the cost of new plants over those built in the previous decade, while higher EPC costs are also having a significant impact, according to EER's analysis.
Wind power has significant benefits over conventional generation sources. For wind, project risks associated with security of fuel supply, construction time, and carbon emission costs are minimized. At the same time, industry scaling has reduced capital and operating costs significantly over the last decade. Supply chain shortages and increased commodity prices have led to increased capital costs over the last few years, but as the industry adjusts to greater demand globally, these capital costs will decrease, according to EER.
In relation to other renewable energy sources such as solar and biomass, wind remains the most cost-competitive and offers the largest potential in Europe in the short term, according to EER.
"With wind power becoming more cost-competitive it will play an important role in Europe's power generation mix going forward, especially in light of the growing risk of energy security, rising fuel costs, and climate change," according to EER senior analyst Alex Klein.
ABOUT EER BRIEFING - COMPARATIVE COSTS OF ENERGY 2007
EER recently released Comparative Costs of Energy in Europe 2007 as part of its Clean Generation Advisory service. This research is available to registered guests of our website. To register click here or follow this link: http://www.emerging-energy.com/user/register.aspx
EER included three price scenarios (low case, base case, and high case). Estimates of the cost of electricity have been calculated using EER's in-house financial model. The information is based on our estimates of the cost of building a new facility in Continental Europe. Actual plant costs can vary significantly based on technology, supplier, and location.
ABOUT EMERGING ENERGY RESEARCH
EER is a leading advisory and consulting firm tracking emerging technologies in global energy markets, based in Cambridge, Massachusetts and Barcelona, Spain. Our customers - which include many of the world's largest corporations and technology vendors - seek our informed, objective view and advice on these fast developing markets. For more information contact Stephanie Aldock at +1 617 551 8483 or firstname.lastname@example.org