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In Wind Power, is Bigger Better?

| Written by John Farrell | 6 Comments | Updated on Aug 18, 2011 The content that follows was originally published on the Institute for Local Self-Reliance website at http://ilsr.org/wind-power-bigger-better/

Update October 2012: The 2011 Wind Technologies Market Report shows weak, but consistent economies of scale in wind power projects.

It seems obvious: every extra turbine in a wind farm comes at a lower incremental cost, making the biggest wind power projects the most cost effective per kilowatt of capacity.

If you bet $20 on that proposition, you just lost $20.

Instead, data from the 2009 Wind Technologies Market Report by Ryan Wiser and Mark Bolinger (a must-read) shows that wind projects between 5 and 20 megawatts have the lowest installed cost per Watt of any size wind project.

There are a few plausible explanations.  On the one hand, the cost savings for ever-larger wind projects are limited.  At some point, the marginal cost of an additional turbine is much like the previous one.

On the other hand, there may be disproportionate costs for larger wind projects.  For example, projects over 20 megawatts must by processed by the Federal Energy Regulatory Commission (FERC), a more onerous step than smaller projects being handled at the state level.  Additionally, projects of inordinate size may require special financing that only a few large firms can handle, adding a price premium.  Finally, large projects may only be possible with the addition of new transmission line capacity, both a costly and time-consuming process.

Ultimately, distributed wind projects may provide the better bet for cost-effectively expanding electricity production from wind.

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About John Farrell

John Farrell directs the Energy Self-Reliant States and Communities program at the Institute for Local Self-Reliance and he focuses on energy policy developments that best expand the benefits of local ownership and dispersed generation of renewable energy. More

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  • http://power-to-the-people.net Fiona Woo

    Hi John, do you know where one can find that market report? The current link in your post is broken. Many thanks in advance.

  • James Palmer

    This is very odd–why are you using the 2009 report’s chart (page 42) rather than the 2011 report’s chart (page 31)? Maybe because the current data do not so nicely demonstrate your bias? Or is it that you are just slow to catch up on your reading?

    For other readers–there is virtually no difference in efficiency between projects in the 20-200+ MW range, and smaller projects have a very small penalty. There is now no reason that projects should be sized for economic reasons–they should be sized for the environmental and social conditions of the site.

  • http://www.ilsr.org/about-the-institute-for-local-self-reliance/staff-and-board/john-farrell/ John Farrell

    @James

    When I published this piece, the 2011 report hadn’t been released yet and the 2010 report confirmed the findings. You’re right about the updated data, thanks for sharing it.

    Sincerely,
    John