Wind farm construction costs declined 27% since 2013

  • August 17, 2021

concrete tower Archives - Wind farms constructionWind farms construction

 

The U.S. Energy Information Administration reported the average U.S. construction cost for wind farms in Oklahoma, Kansas, Texas and other states plunged significantly since 2013 even as onshore wind generating capacity nationwide increased 74%.

The EIA stated that the average cost fell from $1,895 per kilowatt in 2013 to $1,391 per kilowatt in 2019. Wind farm generators that fall under the Southwest Power Pool, including those in Oklahoma had a 2019 average cost of $1,426 per kilowatt.

U.S. capacity-weighted average wind construction cost and capacity additions

The SPP manages the electric grid in all or part of 14 states including Oklahoma, Kansas, Nebraska and northwest Texas.

In MISO or the MidContinent Independent System Operator, which covers the Midwest United States as well as parts of Arkansas, Mississippi, and Louisiana, the average construction cost for wind in 2019 was $1,637/kW. Average construction costs in both SPP and MISO were above the U.S. average in 2019.

 

average onshore wind generator construction cost for select market regions

Source: U.S. Energy Information Administration, Electric Generator Report
The lowest construction costs for wind generators was found in the area controlled by ERCOT, the Electric Reliability Council of Texas.

Average onshore wind construction costs for the Electric Reliability Council of Texas (ERCOT), which manages about 90% of Texas’s electric load, totaled $1,114/kW in 2019 and were less expensive than the U.S. average for that year. ERCOT installed the most wind capacity of any U.S. electricity market region in 2019 (3.5 GW) and also had the most total wind capacity (26 GW) as of December 2019. Favorable market conditions, wholesale prices, and geographic advantages contribute to lower construction costs in ERCOT.

All three market regions—ERCOT, SPP, and MISO—are in the Wind Belt, an area in the central part of the United States where some of the country’s best wind resources and a large share of U.S. wind capacity are located. Wind Belt states, such as New Mexico, Kansas, and Colorado, were among the least expensive in the United States for constructing wind generating capacity from 2013 to 2019 according to the EIA.

Like many states in the Wind Belt, California had significant wind capacity (5.9 GW) at the end of 2019. However, California had relatively high average wind plant construction costs, averaging $2,310/kW for new wind installations between 2013 and 2019. The high costs could be driven by a variety of factors, including state policies and regulations, land use restrictions, and difficulties in developing wind projects.

Source: EIA

Jerry Bohnen