Energy Comparisons

Wind: a cost-competitive resource

Abundant natural wind resources, modern wind turbines, and a pro-growth regulatory climate make Texas Wind power a cost-competitive resource. Wind power is produced for about $0.05 per kWh. Cost per kWh for other generators is: natural gas $0.09; coal $0.06, clean coal $0.11; nuclear $0.08; biomass $0.07; solar $0.15-0.21.

Increasing the amount of wind in Texas' energy mix will insulate from the volatile price of oil and gas, and reduce energy market costs for ratepayers. In recent years, the fuel cost of coal has increased from $1,200 per kW to $3,000 per kW. Natural gas, Texas' main fuel source for electrical generation has seen more than a 1000% increase in fuel cost within the last decade. The fuels Texas has relied on for decades carry costs that are not necessarily reflected in the prices consumers pay. The cost of pollution is borne by all. Wind is clean and its price is not tied to rising fuel costs. With enough wind energy in the marketplace, spot bids are affected, meaning all customers get lower prices than if wind had not been in the mix. This is evidenced today in West Texas, where wind has lowered local prices. When transmission capacity is added, wind will have the same impact in Texas' large urban areas

While some may complain that the cost of wind is impacted by the Production Tax Credit (PTC), 1.9 cents per kWh, the fact is every energy source in America benefits from some form of taxpayer investment - whether tax credits, direct subsidies, or federal research expenditures. The Texas Comptroller estimates that for every dollar wind power receives in States and Local subsidies, oil and gas receives $95. In 2006, Non-renewable energy sources (Coal, Oil & Gas, and Nuclear) received $7.4B in Federal Subsidies. Wind energy received a small fraction of total federal subsidies, 3.4%. Source: Texas Comptroller of Public Account, The Energy Report, May 2008

Wind is a proven technology that can be counted on to provide a significant benefit to all Texans, even customers of electric providers that do not use wind power. The wind industry has never viewed itself as 'the' answer to our energy needs, but a part of the solution. With the potential for federal carbon regulation legislation passing, wind will be even more cost competitive since it has zero emissions

 

* 20 year LEVELIZED COST OF ELECTRICITY (LCOE). Includes estimate of capital cost, fixed operating cost, variable and operating cost and fuel cost.

1. Average of 3 IGCC designs (GE, CoP E-Gas, Shell), "Cost and Performance Baseline for Fossil Energy Plants", Exhibit ES-2, DOE, May 2007. CO2 transport, storage and monitoring adds <0.5 ¢/kWh, increase in COE ~ 3 cents/kWh (36%).

2. "The Future of Nuclear Power", Table 5.3, MIT, 2003. These figures are in 2007 dollars and do not include an estimated decommissioning cost of $350 million per plant.

3. "Annual report on U.S. Wind Power Installation, Cost and Performance Trends: 2006, DOE. Figures are capacity weighted averages and include a federal production tax credit of 2 cents/kWh.

4. These prices are for the modules and assume a volume purchase such as an industrial customer would make. Adding installation labor and the inverter ($700 per installed kW) raises the total cost. However, there is a 30% federal tax credit and also an additional 8% can be subtracted because most of the solar will be distributed generation and will not experience line loses. Adjusting for the latter yields a cost of 15.3 cents for the solar module and the inverter. See http://www.solarbuzz.com/. Solar Thermal Numbers from EIA as contained in attachments to Michael J. Zimmer 12/12/07 Testimony.

5. Direct fired biomass, LCOE value interpolated for 2005