Fossil fuels have never had a serious competitor, until recently.
Wind power is one of the fastest growing industrial segments in the world, starting off as just a small niche market 15 years ago, wind now provides Europe with more than 10% of its consumed power and the IEA’s World Energy Outlook predicts it to be the leading source of electricity generation in 2040. In 2014 alone, $100bn was invested into wind energy — and for good reason.
According to the levelised cost of energy (LCOE), onshore wind already generates electricity cheaper in many parts of Europe and the rest of the world than any other technology. In early August 2015, wind energy prices plummeted to an all-time low in the US, falling to 2.35 cents per kWh for PPAs (long-term contracts), meaning a 66% decline since 2009. Also, turbine prices went down by around 30% since 2009, with prices in China – the world’s biggest wind power market – declining by as much as 35%. Contrary to fossil fuels and nuclear, wind power has also room for significant cost reductions.
Fossil fuels receive a whopping $10m every minute, not including direct subsidies and the cost of taxpayers who have to make up for pollution and other environmental damages. On the other hand, wind is free and wind turbines have marginal operational costs. The cost-effectiveness of the market is beneficial to economic growth. Investing in wind helps increase demand and thus the competitiveness of the market, which will further drive down long-term energy costs.
