Wind Power Costs Continue to Rise

Published November 1, 2007

Environmental issues are not the only dark clouds dimming wind power’s appeal. Demand for wind power is driving up the price of wind turbines substantially, further raising the already-high costs of wind-generated power.

The U.S. Department of Energy reports the average cost of a turbine per megawatt of power generated rose 17 percent in 2006 and will likely rise by more than 14 percent this year. Because utilities have no control over these costs, ratepayers or taxpayers end up paying the final bill.

In addition, wind farms have already been constructed in the most productive wind sites, leaving less-productive and less-reliable sites available for current and future wind farm construction.

In response to rising costs, some utilities are cancelling plans for new wind farms. The Long Island Power Authority announced in late August it is scrapping plans for a new wind farm, after finding the originally estimated construction cost of $200 million had ballooned to more than $800 million.

Meanwhile, one of the largest wind marketing companies in the country has decided to raise prices and change the mix of energy it sells. In a newsletter to customers in New York, Green Mountain announced “changing market conditions” are causing “reduced availability and higher prices for wind energy in New York.”

As a result, the company is raising its surcharge for green energy from 1.5 to 1.6 cents per kilowatt hour and reducing the amount of wind energy packaged in its “Pollution Free” plan from 30 percent to 10 percent.

Sterling Burnett