The True Costs of Renewables: Wind power cost-reduction potential and learning curves
The International Renewable Energy Agency (IRENA) held a workshop to consult with its member countries about data collection and analysis to fully capture the trend of falling costs for wind power. Onshore wind power is now one of the most competitive renewable power generation options available. This is due to a combination of technology improvements that have raised capacity factors, coupled with falling wind turbine prices. Onshore wind, where good resources exist, can now compete with fossil-fuel-fired baseload plants.
To date, the reduction in onshore wind power costs has not been well documented in analysis available to policy makers. The latest analysis dates back to the mid-2000s and does not capture the trends after the wind turbine price peak of 2009. This analysis gap makes it difficult to realistically analyse the competitiveness of onshore wind technology today or future cost reduction potential.
In response to this gap, IRENA is working to provide a comprehensive update of the “learning curve” for wind, in order to identify average cost reductions for every doubling in cumulative installed capacity. In addition, IRENA’s new analysis will divide reductions in the levelised cost of electricity (LCOE) from wind into technology, wind turbine and balance-of-system cost contributions, giving significant new insights to policy makers.
The analysis is designed to:
- Provide policy makers with evidence about the declines in electricity costs of wind over time.
- Provide policy makers with sound evidence on the competitiveness of onshore wind today by updating the learning curve analysis of wind turbines and installed wind farm costs with additional analysis on the LCOE of wind.
- Inform policy makers of future cost reduction potential by explaining which drivers (e.g., wind turbine prices, technology improvements, balance-of-system costs, etc.) have contributed the most to the reduction in the LCOE of wind over time.