Have we hit the tipping point? Wind cheaper than fossil fuels

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Quick Take: An article in Utility Dive claims that wind has hit the crossover point -- that it is now sometimes cheaper than power from fossil fuels, even considering its variability. - By Jesse Berst

 

Utilities have signed power purchase agreements (PPA) totaling more than 5,670 MW and have received approval to build about 1,870 MW of utility-owned wind generation, according to an October report from the American Wind Energy Association.

 

The upsurge is driven as much by low prices as by renewable portfolio standards.  "Many utilities found the price for wind so attractive that they signed up for more wind generation than originally planned."

 

The article says that an Xcel subsidiary will pay $22 per MWh for nearly 700 MW of wind approved by the New Mexico Public Regulation Commission in November. Another Xcel subsidiary will play a levelized cost less than $29 per MWh.

 

Average wind dropped from $70 per MWh in 2009 to about $40 per MWh in 2012, according to a August report from Lawrence Berkeley National Laboratory. Prices have been falling partly due to increased turbine efficiency. Wind is most competitive in the Interior region and least competitive in the West.

 

Jesse Berst is the founder and Chief Analyst of SGN and Chairman of the Smart Cities Council, an industry coalition.