Report: Wind power helps lower electricity prices

Posted by Pete Danko, EarthTechling

The price of electricity has dropped in states that have developed extensive wind power over the past five years. It’s just a slight drop, but here’s the kicker: the other states have seen a hefty rise.

This bifurcation in electricity costs is highlighted in a new report from the American Wind Energy Association, which obviously wants to convince you and everyone you know that wind power is a good thing – particularly as the industry pushes for reinstatement, preferably retroactively, of recently expired tax breaks (which, no doubt, help the competitiveness of wind).

wind power

image via American Wind Energy Association

But there doesn’t appear to be anything complicated or tricky about the AWEA claim, which is based on data compiled by the U.S. Energy Information Agency.

The AWEA pointed to 11 states that had produce more than 7 percent of their electricity from wind power – Texas, Wyoming, Oregon, Oklahoma, Idaho, Colorado, Kansas, Minnesota, North Dakota, South Dakota and Iowa. In those states, the price of electricity fell 0.37 percent in the past five years.

Meanwhile, in the rest of the states, electricity went up by 7.79 percent.

Even as it acknowledged that many factors can influence the price of electricity, the AWEA said this new data was pretty darn conclusive.

“During last month’s cold snaps, we saw very high wind energy output play a critical role in protecting consumers across the country from skyrocketing energy prices,” Michael Goggin, an AWEA senior electric industry analyst, said in a statement. “This study confirms that wind energy is providing that benefit every day.”

Utilities have been fairly rushing to grab more windpower, both for its value now and as a hedge against possible increases in the price of other forms of power. As the Union of Concerned Scientists noted recently in an exploration of wind’s prospects vs. natural gas, LBNL Lawrence Berkeley National Lab “data shows … higher capacity factors combined with reductions in capital costs has resulted in a 43 percent drop in U.S. average power purchase prices (PPAs) for wind over the past 3 years (from ~$70/megawatt-hour (MWh) in 2009 to below $40/MWh in 2012).”

* Pete Danko, EarthTechling