Wind Power Blows Through Nuclear, Coal as Costs Drop at Sea
Water and electric power plants don’t mix well naturally, unless you add some wind.
Water tends to corrode and short out circuits. So what’s happening in the the renewable energy industry, where developers are putting jumbo-jet sized wind turbines into stormy seas, is at the very least an engineering miracle.
What might be even more miraculous to skeptics like those populating Donald Trump’s administration is that these multi-billion-dollar mega projects make increasing economic sense, even compared to new coal and nuclear power.
“If you have a sufficiently large site with the right wind speeds, then I do believe you can build offshore wind at least at the same price as new build coal in many places around the world including the U.S.,” said Henrik Poulsen, chief executive officer of Dong Energy A/S, the Danish utility that has pioneered the technology and has become the world’s biggest installer of windmills at sea.
Across Europe, the price of building an offshore wind farm has fallen 46 percent in the last five years — 22 percent last year alone. Erecting turbines in the seabed now costs an average $126 for each megawatt-hour of capacity, according to Bloomberg New Energy Finance. That’s below the $155 a megawatt-hour price for new nuclear developments in Europe and closing in on the $88 price tag on new coal plants, the London-based researcher estimates.
As nuclear power costs spiral, prompting a $6.3 billion writedown at reactor maker Toshiba Corp. and delays at Electricite de France SA’s plant in Flamanville, the investment needed to build offshore wind capacity is plummeting.
In Denmark, where the government shoulders much of the development risk, Vattenfall AB last year agreed to supply power from turbines in the North Sea at 60 euros ($64) a megawatt-hour in 2020. Dutch and German auctions due this year provide “ample opportunity” to beat that record low price, says Gunnar Groebler, the utility’s head of wind.
The industry even is taking hold in the U.S., which for years shunned the technology as too costly for a place that historically enjoys lower power prices than Europe.
A federal auction in December for rights to develop wind farms off the coast of Long Island resulted in a bidding war. Rhode Island has commissioned one plant, and developers are also considering work in Maryland, New Jersey and North Carolina.
Although Trump said offshore wind was “monstrous” when it came into conflict with his golf course in Scotland, the U.S. government’s official goal for now is to install 86 gigawatts of turbines at sea by 2050. That’s six times the 14 gigawatts of capacity now in place worldwide, according to the Global Wind Energy Council.