Wind costs continue to fall in recent years, report finds

Maintenance and capital costs for wind energy have continued to drop in recent years, according to a recent report.

Bloomberg New Energy Finance notes that, for onshore wind projects, operation and maintenance (O&M) costs have declined dramatically from €30,906 per megawatt (MW) in 2008 to €19,200/MW in 2012, a decrease of just over 11% a year, or a total of 38% for the period as a whole.

“O&M services have become an increasingly important revenue stream for manufacturers as the installed base of turbines has grown, and particularly during the industry’s current slowdown,” Bloomberg New Energy Finance notes. “Turbine manufacturers have been competing hard for service contracts, resulting in keener pricing.”

Meanwhile, survey participants believe O&M wind turbine costs will continue to stay steady until 2015, helping to make wind energy a more affordable energy investment choice.

“Wind power has done much to improve its competitiveness against gas-fired and   coal-fired generation in recent years, via lower-cost, more technically advanced turbines, and more sophisticated siting and management of wind farms,” said Bloomberg New Energy Finance chief executive Michael Liebreich.

“This new O&M Price Index shows that servicing wind farms at the operating stage is also becoming much more cost-efficient,” he said.

For those who do not know, O&M costs for wind energy include unscheduled and scheduled maintenance, and replacing component parts (gear boxes, turbine blades, and generators). These are very important in order to make sure wind farms run effectively and efficiently.

Bloomberg’s O&M price report consisted of data covering 104 undisclosed and disclosed O&M contracts from the Americas and Europe, contracts which involved 38 of the top wind energy developers.

Some other interesting statistics from the first of two yearly O&M reports include:

• Average length of an operations and maintenance contract has increased by almost 2.5 years, from 4.5 years in 2008 to 6.9 years in 2012, citing manufacturers’ willingness to go for more long-term contracts.
• The United States showed the most competitive O&M pricing, while the United Kingdom and Eastern European countries had the highest costs. Narrower local supply chains in both the UK and in Eastern Europe and higher wage costs were likely factors in contributing towards the UK and Eastern Europe’s less competitive costs.

As renewable energy sectors continue to mature, reports like this one will continue to give a firm guage on how these emerging industries are maturing. By looking over the numbers, the wind energy industry looks like it is blowing in the right direction.

This article was first published at CleanTechnica. Reproduced with permission.