Wind Power Economics: From Cost to Profit
Understanding the costs, revenues, and financial viability of wind energy projects in competitive electricity markets
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Section 4 of 5Wind Power Economics
The economics of wind power have improved dramatically over the past decade, driven by technological advances, manufacturing scale, and policy support. Modern wind farms can now compete directly with fossil fuel generation in many markets, offering stable, low-cost electricity with zero fuel costs.
Key economic metrics include Levelized Cost of Energy (LCOE), which represents the total lifetime cost of electricity generation, and Net Present Value (NPV), which accounts for the time value of money in long-term investments. Wind power's economics depend heavily on wind resource quality, turbine technology, and electricity market conditions.
Cost Reduction Journey
Wind power costs have fallen 80% since 2009, from $0.25/MWh to $0.05-0.08/MWh today. This decline has been driven by larger turbines, better designs, and manufacturing improvements, making wind competitive with all fossil fuel sources.
Interactive Wind Farm Economics Calculator
Wind Farm Configuration
Economic Analysis
Cost Breakdown
Market Context
• Global wind LCOE has fallen from $0.25/MWh in 2009 to $0.05-0.08/MWh today
• Competitive with natural gas ($0.04-0.07/MWh) and solar PV ($0.05-0.10/MWh)
• Offshore wind typically costs 50-100% more than onshore but has higher capacity factors
• Policy support and technological improvements continue to drive down costs