Industrial Insight

Wind is expensive. | January 30, 2011

NUMBER OF THE WEEK: $5,975/kW. That is what the U.S. Energy information Administration published as the estimated “Overnight Capital Cost” for Off-shore Wind, in its “Updated Capital Cost Estimates for Electricity Generation Plants, November, 2010.” The estimates are developed for plants of certain specific sizes explained in the study.

“Overnight Capital Cost” is a somewhat vague concept. It can be considered as the cost as if the plant suddenly appeared overnight, fully operational. It does not include the interest costs incurred during the planning and construction of the project.

The cost includes site work and all equipment and installation, indirect costs, fees, contingencies, and owners costs (excluding financing costs) but including developer’s profit. Further, the cost does not include any special transmission lines needed to deliver the electricity over distance or any possible back-up such as that required for wind and solar.

Direct comparisons with other types of plants are not exact, but, if used cautiously, useful for approximation. For example, a Dual Unit Nuclear plant is estimated to have a capital cost of $5,335/kW.

At first glance Offshore Wind, with a capital cost of $5,975/kW, appears to be roughly comparable with nuclear. However, one must consider that the average annual production from wind is roughly 30% of nameplate capacity while, in the US, nuclear production is over 90% of nameplate capacity. Thus, as measured by average annual capacity, the electricity produced from offshore wind becomes very expensive, about three times that of the same output from nuclear.

This high cost is even before calculations of the high cost of transmission lines and expensive back-up for wind are included. Further, a nuclear plant has a life of 40 years or more while wind has a plant life of about 20 years. When considering the corrosive effects of salt spray, the plant life of offshore wind is probably well less than 20 years.

Again, one must be cautious when using the above numbers for direct comparison. The complete study, including operating and maintenance costs, is referenced under “Energy Issues.” A fuller comparison between wind and nuclear by Kent Hawkins is referenced under “Whistling in the Wind.”


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I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.







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