In Wind Power, is Bigger Better?

Date: 18 Aug 2011 | posted in: Energy, Energy Self Reliant States | 4 Facebooktwitterredditmail

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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John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.