Xcel Wind Blade Assembly

Building New Wind Power is Cheaper Than Any Other Power Source

Electricity prices are not directly related to creating safer streets for all, but they are related to our interests in housing and the environment. It is important to recognize some of the turning points in the history of sustainable energy.

One of those turning points happened just last year, when onshore wind power (like that produced in Minnesota and the Upper Midwest) became cheaper to build as new capacity than nuclear power was to operate as existing capacity. According to financial research and management firm Lazard, building new onshore wind power can generate electricity for as low as 2.8 cents per kWh, while operating existing nuclear power plants costs about 2.9 cents per kWh. (My last Xcel residential bill was 18.3 cents per kWh.)

In the chart below, the blue bars show the range of prices for building new capacity, while the gold diamonds show marginal rates of existing capacity for offshore wind, nuclear and coal, respectively.

Lazard 2019 analysis of electric costs for sources including wind solar nuclear and coal

Source: Lazard

This turning point is the culmination of a long-term trend of decreasing costs for building new capacity for wind and solar. In 2009, the cheapest unsubsidized new wind power cost 10.1 cents per kWh, while the cheapest solar cost 32.3 cents per kWh. Over the next ten years, the price of wind power dropped 72 percent and the price of solar dropped 89 percent. Now it is cheaper to build solar at utility scales than to build new natural gas capacity, even with historically low natural gas prices following the fracking boom.

the price of wind power dropped 72 percent and the price of solar dropped 89 percent

Source: Lazard

What does this mean for the future of the world’s energy mix? Bloomberg New Energy Finance issued a 2019 report on trends in the energy sector. They predicted that by 2050, if current trends continue, global electricity will be 62 percent renewables (not counting nuclear as renewable), and a full 48 percent will come from just wind and solar. Thirty-one percent of global electricity generation will continue to be powered by fossil fuels 30 years from now, according to BloombergNEF.

Bloomberg chart of changing mix of energy sources over next 30 years and historic

Source: BloombergNEF

If the cost differential between new wind builds and existing fossil fuels grows in the next few years, these trends could accelerate. We may not be that far out from a utility like Xcel Energy replacing their two existing nuclear plants in Minnesota earlier than planned (in 2040) with a new investment in wind capacity at utility scale.

You can be a trendsetter in this change by signing up for Xcel’s Windsource program. There is also the Renewable Connect program that includes solar power, but that program is currently on a wait list. Changing your residential or commercial energy sources can help your wallet and the environment!

What do you pay for your electricity per kWh? What changes are you making to help the environment? Share your electric bills and green dreams in the comments.

6 thoughts on “Building New Wind Power is Cheaper Than Any Other Power Source

  1. Sheldon Gitis

    So why is Xcel charging more than 6 times the “as low as” cost of wind and nuclear? Is the cost of natural gas and coal that much higher? Or, is there an “as high as” cost for wind and nuclear that’s many times more expensive than the “as low as” cost?

  2. Monte Castleman

    I don’t see Xcel retiring their nuclear plants ahead of time. They made some very expensive investments to extend their lives and the nuclear plants provide a constant, 24/7 base load that’s becoming increasingly rare as coal plants are retired and things like Tesla’s battery packs to level out demand in lieu of having base load are more at a concept stage right now.

    At some point if we assume fossil fuels are going to go away, we’ll need enough renewables for our current electricity need, plus to provide electricity for all our vehicles. Is this even feasible, or do you get diminishing returns once we’ve used up all the best spots for wind and solar?

      1. Daniel ChomaDaniel Choma

        Apologies Monte, (posted on phone) this note was meant for the above comment.

        Re: Load: Insert Metallica joke. Which I will always on principle make)

        MN doesn’t have the same overwhelming load capacity as the east coast because our cities are a lot smaller. Its hard for me to justify nuclear here, as our load just isn’t New Jersey New York Philly kind of big.

        There’s a lot of data showing that with distribution technology improvements, load is not an issue.

        The other thing worth noting (at least in passing) is British Petroleum is actively investing in green energy at a faster clip than Xcel is willing to provide as a state sanctioned monopoly.

        If I’m a betting man, I think it’s wise to see what one of the world’s largest and richest corporations is doing with its money. If BP and its army of high paid lawyers and engineers thinks green energy is feasible in the near future, I think we should take strong note.

        If the $ is vying for ownership in this industry, that tells me the tech is here or nearly here.

        We would be wise to push our public utilities commission to take note.

  3. Brian

    How do you provide power when wind and solar are not providing power? Right now, there is an organization that manages the grid and forecasts how much wind and solar will be available. They request that fossil fuel peaking plants be activated if wind and solar are not enough.

    I have solar at home that covers my needs, but I still need a grid connection to cover when the sun is not shining.

    1. Daniel ChomaDaniel Choma

      That request is an explicit request that those plants are built using public money.

      What happens when those peaking plants are out of date in 5 years?

      The public will still be paying for an out of date technology through a state sanctioned monopoly for another 25 years.

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