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Developing wind power saves consumers money

A recent article (“Minnesota Power to meet renewable quota 10 years early”) provided an excellent example of what many already know: Developing wind power saves consumers money.

In recent weeks, local utilities have been particular vocal about those changes. Minnesota Power noted that it’s “found a way to meet Minnesota’s renewable energy standard early and reduce costs at the same time,” while Northern States Power Co. CEO added that wind projects “offer lower costs than other possible resources, like natural gas plants. These projects offer a great hedge against rising and often volatile fuel prices.”

Similar statements are being echoed from Colorado to Oklahoma, consistent with analysis by the U.S. Energy Information Administration demonstrating that newly built wind generation is now cost competitive with all forms of electricity production.

Also, by displacing the most expensive, least efficient source of electricity on the utility grid — usually an older fossil-fueled power plant — added wind power directly reduces harmful air emissions. Wind energy’s lifecycle greenhouse gas emissions are a few percent of those of fossil fuels, lower than nuclear, and even lower than nearly all other renewable energy resources, according to a recent comprehensive study by the National Renewable Energy Laboratory.

Finally, by bringing economic development and added tax base to rural communities, American wind power is a significant economic growth opportunity. Already generating 14.3 percent of its electricity from wind power — and with excellent wind resources and a smart state renewable energy policy — Minnesota is quickly becoming a national leader in wind development.

Elizabeth Salerno is chief economist & director of Industry Data & Analysis for the American Wind Energy Association.

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Comments (5)

  1. Submitted by Connie Sullivan on 08/09/2013 - 11:55 am.

    As a WindSource customer of Xcel Energy for some years now, and paying a hefty premium per KWH to have my electricity ostensibly wind-sourced ($.0353 more per KWH), I wonder when this kind of study that shows wind now to be price-competitive with other sources will indeed have an impact on how much Xcel continues to charge us for wind.

    • Submitted by Jay Willemssen on 08/09/2013 - 04:18 pm.

      Windsource actual price

      One needs to subtract the fuel cost charge, which was $0.030664 on the latest bill. They even have a “Net Windsource Charge” line item on the statement. So it’s a little less than 1/2 penny per kWh this month.

      Cost me 4.6 pennies per day this past billing cycle, or the equivalent of about 2 beers over the course of a year. Hardly hefty.

      What’s potentially confusing about Windsource is that what a customer is paying for is sourced wind in excess of mandates, meaning it nudges the utility to produce more than mandates and basic economics would otherwise dictate.

      New wind’s lower cost relative to new coal and nuclear will continue to bake into the energy and fuel cost charges over time, and are a good hedge against natural gas price fluctuations, especially as the grid shifts more heavily to natural gas away from coal.

      The EIA has a nice little piece on increasing efficiency of wind generators in the latest Electricity Monthly Update, particularly the steep rise in capacity factor for Midwest generators over the past decade.

    • Submitted by Carola Tschiemer on 09/05/2013 - 04:25 pm.

      cost of wind power has come down by more than 50% in the past fo

      I received the following information:

      Dear Carola,

      Financial advisory firm Lazard has recently released an analytical report with an encouraging conclusion – the cost of wind power has come down by more than 50% in the past four years. You can read through the cover letter here, or the full report here.

      This is an exciting update. It shows the tremendous progress that the wind industry has made in the last several years. It also makes the case that a long-term extension of the federal tax incentives that have driven these cost reductions – the renewable energy production tax credit (PTC) and investment tax credit (ITC) – will give wind energy companies the certainty they need to make further advancements, and achieve full cost-competitiveness with other energy technologies.

      The federal tax incentives are set to expire at the end of this year, and there is only a slim chance that they will be extended prior to this date. One of the most feasible options for extending the credits is through the comprehensive tax reform legislation that the congressional tax committees are currently working on.

      On this front, we are happy to report that 60 members of the U.S. House of Representatives recently sent a letter to their tax committee leaders, urging them to “include policies that promote America’s renewable energy economy” in that bill. You can weigh in with the tax committee leaders as well – visit this web page to see the template message that we’ve written for you. You can personalize that message and send it in to the web site the tax committees have designed to accept feedback from the public –

      We’ll be in touch about further wind industry developments, and updates on legislative progress. Many thanks for your dedicated support for wind energy.


      Chris Chwastyk
      Vice President, Federal Legislative Affairs
      American Wind Energy Association

  2. Submitted by rolf westgard on 08/09/2013 - 06:11 pm.

    Another commercial from the wind lobby

    IMO wind energy is intermittent and costly, requiring huge direct subsidies like the production credit of $23 mwh. This letter is another mass produced commercial from the American Wind Energy Association.

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