Isn't wind power really expensive?
No. The cost of generating electricity from the wind has fallen dramatically over the past few years. And energy from the wind will become even cheaper in the future as greater experience is gained in manufacturing and developing this relatively new technology. When the full costs of the environmental damage caused by fossil fuels or nuclear power are taken into account, wind power is an even better buy.

For example, it has been estimated that if the cost of environmental damage were included, the price of electricity from coal would be three times higher than electricity from the wind. The planned carbon tax (to be introduced in 2008) tries to internalise these negative externalities and will make fossil-fuelled forms of generation less attractive and more expensive. In an NZ Herald article it was estimated that a tax of $15 a tonne of carbon dioxide would add 0.8c a kilowatt hour to the cost of gas-fired electricity generation, and 1.5c/kWh to coal-fired generation. Climate change consultant Stuart Frazer thinks: "this alone should have a positive effect on the viability of wind power". In other countries, the full costs of nuclear power, including dealing with highly radioactive waste and decommissioning of old plants, are still not included in the price of electricity.

The average unit cost of producing electricity from wind is somewhere between 6c and 8c/kWh according to an estimation in the publication New Zealand Energy Outlook to 2025 from the Ministry of Economic Development. This price is comparable to other forms of new power generation, such as hydro and coal.

Meridian's CEO, Keith Turner noted in the NZ Herald (4. Nov 2004) that NZ could generate 2,500-3,000 GWh (equivalent to 625 - 750MW of installed capacity) of electricity from the wind at prices of 6c/kWh or even lower.

When the Maui gas field runs dry in the near future the costs of gas based electricity generation will inevitably rise and wind energy may become even more competitive.

Notes:
(1)nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3586235 (2) www.windenergy.org.nz/news/articles.htm

 
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