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A new report recently published by the U.S. Department of Energy’s National Renewable Energy Laboratory shows a downward trend in levelized cost of energy (LCOE) for both land-based and offshore wind projects since 2010. The 2013 Cost of Wind Energy Review presents a picture of the levelized cost of land-based and offshore wind energy using real and modeled data that represents 2013 market conditions.
According to the report, the average LCOE for land-based projects was $66/megawatt-hour (MWh) and $215/MWh for offshore projects in 2013, compared to $71/MWh for land-based and $225/MWh for offshore in 2010. The LCOE analysis relied on inputs that included total capital expenditures, operating expenditures, fixed charge rate, net annual energy production, and net capacity factor. Although the analysis shows that LCOE can vary widely based on changes in any one of several key factors, the variable with the most dramatic effect on LCOE is capacity factor—which is the case for both land-based and offshore projects.
Additional conclusions in the 2013 report include:
- The decrease in LCOE from 2010 to 2013 for the land-based projects can be attributed more to the turbine technology and the offshore decreases to the balance-of-system costs.
- The majority of the land-based project cost (68%) is in the turbine itself, whereas it makes up only 32% of the offshore reference project cost.
- Although the reference project LCOE for land-based installations was $66/MWh, the full range of land-based estimates covers $50–$103/MWh.
- The reference project offshore estimate is $215/MWh, with a full range of $147–$282/MWh.
- This dramatic range is mostly caused by the large variation in capital expenditures ($3,200–$6,000/ kilowatt) reported by project developers.