This Post describes the factors which influence the costs of generating electricity from wind energy, and also how much we pay for it.

How much does wind energy cost to generate?
Wind energy is different from many other forms of energy generation because the fuel, i.e. the wind, is free. Most of the costs of a wind farm are paid “up front” when the wind farm is built. These are the capital costs and cover the cost of the turbines and their installation.

Capital costs
The capital cost of a wind farm is made up of a number of components (see the figure below). A typical cost breakdown indicates that nearly two-thirds of costs are associated with the wind turbines themselves. About a quarter of the cost is for other necessary installations including roads, foundations and electricity cables; the remainder covers installation, planning, legal and other costs.

Capital cost breakdown for a typical wind farm

Large wind farms are normally cheaper to build per turbine than smaller wind farms, as
broadly the same infrastructure cost – roads/tracks, electricity connection and development
costs (planning, legal etc) – is spread over a greater number of turbines. This is reflected in
the cost of energy from different-sized wind farms.
Costs for wind farms are very site-specific and depend on the site location and conditions.
So, remote sites with difficult access will be more expensive to build on.
Capital costs for wind farms in the UK have dropped significantly since the first commercial wind farm was built in 1990. In 1991, capital costs were around £1000/kW of installed capacity and currently they are around £700/kW. This is due both to reductions in the price of turbines and the increased size of turbines. The increased size enables some economies in the balance of plant costs: the foundations, electrical infrastructure and roads.
The cost of wind power is expected to come down further in the future, through both improved products and economies of scale from increased production of machines.
Operating costs
Operation and maintenance costs are incurred during the routine operation of the turbine. They include regular servicing of the machine, land rental, rates and insurance. There are relatively few running costs for wind generators compared with other types of generation and they require comparatively little supervision. Operating costs can be higher for remote farms that are difficult to access. However, time and money can be saved if several turbines are serviced during the same site visit. The cost of maintenance is generally lower for a machine sited within a wind farm than for a machine sited on its own. Operation and maintenance costs vary considerably, ranging from €9 to €23/kW/year. The annual charges against the capital (repaying the capital plus interest) are much higher than this – typically by a factor of five to ten. Energy output
The energy costs of a wind farm depend on the amount of electricity generated as well as the capital and operating costs. The main influence on the energy produced is the wind speed at the site. The figure below opposite shows the variation in annual energy output with wind speed for a typical wind turbine and the effect that this has on the cost of energy (all other things being equal). However, the electricity output also depends on the design of the turbine itself (the power curve), how reliable the turbine is (generally called availability), how much the turbines within the farm shield each other from the wind (known as the wake effect) and energy losses.

Variation of annual electricity generation and electricity price with wind speed
for a typical 600kW machine

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