Wind Power Lowers Electricity Costs

An article from the European Wind Energy Association (EWEA) outlines how wind power works to reduce overall electricity prices. The study commissioned by EWEA looked at recent data from a number of studies across Europe. “We took 15 studies on the merit order effect from a range of countries, all in Europe, that were published no later than 2005 and summarised their results. They all show that adding more wind can make the power price go down, according to one study as much as 23 Euros (more than $28 at current rates) per MWh.” The ‘merit order effect’ simply refers to more expensive technologies, like gas turbine plants, being used less frequently, as less expensive options are available.

One objection raised by wind energy opponents is that wind power’s variability makes it difficult to bring onto the grid. In reality, with weather prediction, the amount of electricity that is likely to be produced by wind farms can be accounted for, and factored into the overall production needed to satisfy grid demand. “As a general rule, additional wind replaces coal during hours of low power demand and gas during hours of high demand, but ‘the overall amount the price goes down depends on the power mix in the country, and how much more expensive the fuels are that wind is replacing.’”

With wind overtaking gas for power production in Europe, the economics obviously make sense. Even for people who aren’t interested in the carbon emission reductions obtained through increased use of wind, the cost and capacity benefits wind offers will help encourage more use of wind power.

via: Wind Directions (PDF)

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