Are wind prices falling or are rising globally is a question often asked. Multiple aspects need to be looked at to understand what the reality is. These include

1. What is cost of turbines in a  wind farm system 
2. What performance of wind turbines has been doing – size and capacity
3. Where are wind farms located

Wind Turbines Equipment Prices

Wind turbines prices have jumped in recent years. This image from Canary Media shows the average price of wind turbines.

Firstly, is this real or cash terms? The cost of everything has increased in recent years. In fact, the paragraph under the chart’s source article helpfully points out that importantly, the cost of wind in MW. As the chart shows, there has been some modest decline in costs, but $1m/MW, is broadly been the ballpark figure. However wind power is not alone in this price trend reversal, every major source of electricity including fossil fuels is also experiencing a spike in the costs of labour, land leases, components and labour. Driven by supply chain woes, continuing repercussions of the Covid-19 pandemic and the rising costs of all parts of the supply chain. 

Turbines Getting Better and Efficient.

Turbines are getting bigger and more efficient. More energy (MWh) is produced per unit of power (MW). A 15MW turbine made today does not produce 15x what a 1MW turbine built 20 years ago. It’s more like 30-40x. The rough CAPEX of new generation at £1.3m/MW is probably not far off but the graph should have used MWh instead which is the basis of LCOE. (Levelised cost of  electricity).

Also, the costs of wind energy also depends on things like the up-front development costs and operational costs. Industry has got much better at doing wind over the years. This means further cost reductions, as there are fewer costs to be recovered.

This image shows the breakdown of costs for an offshore wind turbine where 48% is the cost of the turbines. Foundations are a further 24%.

So, in the timeline of the chart, CfDs for offshore wind awarded in 2012 were £150/MWh. CfDs awarded last month were £58/MWh (in constant 2012 prices). That’s nearly a third of the price. Not quite what the chart is presenting, but what matters to consumers.

Bigger more expensive turbines decrease the cost of energy.   

Country Differences

China’s installed wind turbine cost drops to one-fifth of the US with wind soaring ahead in China. The installation price of turbines dropped nearly 45 per cent thanks to technological advancements and economies of scale, according to government tender documents. The installation price is now slightly more than 2 yuan (US$0.28) per watt, significantly cheaper than last year’s lowest domestic price of 3.9 yuan per watt. The cost in China is now $28/MWh.

Electricity Costs Falling

ARENA claimed the cost of utility-scale wind energy in Australia was expected to continue falling, with new wind farms expected to deliver electricity at around $50-65/MWh in 2020 and below $50/MWh in 2030. That has not happened due to compliance costs.

Turbines Getting Larger

References

1. https://x.com/BarnabyCBW/status/1849480681123893724
2. Historic breakthrough’: China’s installed wind turbine cost drops to one-fifth of the US in green energy race  March 2024 https://www.scmp.com/news/china/science/article/3257036/historic-breakthrough-chinas-installed-wind-turbine-cost-drops-one-fifth-us-green-energy-race
3. Chart: Wind turbine prices surged to decade high in 2022 May 2023. https://www.canarymedia.com/articles/wind/chart-wind-turbine-prices-surged-to-decade-high-in-2022
4. Wind energy in Australia 2020 https://arena.gov.au/renewable-energy/wind
5. Wind Power: Value of wind power exceeds costs, report finds https://www.renewableenergyworld.com/wind-power/value-of-wind-power-exceeds-costs-report-finds
6. Wind Turbines: the Bigger, the Better 2024 https://www.energy.gov/eere/articles/wind-turbines-bigger-better