Wind Turbine Costs Up
FUTURE PUNDIT
If you are waiting for alternative energy sources to become much cheaper, well, keep on waiting. Wind turbine costs are up for both offshore and onshore sights.
Shell's decision to sell its stake in London Array shows how difficult it will be to meet those goals. After the announcement on May 1, Skaerbaek, Denmark-based Dong Energy and Dusseldorf- based E.ON, Germany's biggest utility, said they may reduce the size of the project.
``Rising costs of materials,'' including steel and turbines ``are the reasons for reassessment of our position,'' said Shell spokeswoman Eurwen Thomas.
The price of offshore turbines rose 48 percent to 2.23 million euros ($3.45 million) per megawatt in the past three years, according to BTM Consult APS, a Danish wind power consultant. By comparison, land-based rotors cost 1.38 million euros per megawatt after rising 74 percent in the same period.
Some of that price rise might be due to strong demand for wind power. But materials cost increases played a role too. Higher commodities prices have pushed up prices for steel, aluminum, copper, and other materials used in wind tower construction.
So far the only energy source which looks like it might be getting ready for big price drops is solar. But it is also one of the more expensive ways to generate electricity. So it has plenty of room for improvement. The future costs of energy look pretty inflationary to me.
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