Reviewing the potential of wind energy cost reductions

We are in the midst of a dynamic period in the energy transition. Joshua S Hill writes a good article on the CleanTechnica website about a report from Lawrence Berkeley National Laboratory on how we may be underestimating the potential for and uncertainty of wind energy cost reductions.

 

Berkeley Lab Suggests We’re Underestimating Potential & Uncertainty Of Wind Energy Cost Reductions

A new report by researchers from Berkeley Lab has raised the possibility that we are underestimating the potential for and uncertainty of wind energy cost reductions.

There has been a lot of coverage lately of the dramatic cost reductions for wind energy over the last few years, and the potential this has for challenging fossil fuel-based electricity generation. The most recent of these headlines was only last week, when the International Energy Agency (IEA) published its Medium-Term Renewable Market Report, highlighting already low wind (and solar) prices, and the potential for these cost reductions to deepen, by as much as 40% to 50%.

However, new research from Berkeley Lab, and published in the journal Nature Energy, has raised the possibility that we are underestimating the potential for cost reductions in wind energy, as well as the uncertainty around wind energy cost reductions. The consequences of such assumptions could have significant impact on the industry, leading to low estimates of wind deployment, under-appreciation of the uncertainty in wind deployment, and under-investment in wind research & development (R&D).

The study, Expert elicitation survey on future windenergy costs, is the largest ever “expert elicitation” ever conducted on an energy technology, surveying 163 of the world’s foremost wind energy experts, in a project led by Berkeley Lab, NREL, the University of Massachusetts, and participants from the IEA Wind Technology Collaboration Programme Task 26.

The authors of the report point first to the already rapid growth of both onshore and offshore wind energy over the last decade, but note that “the long-term contribution of wind to future energy supply, and the degree to which policy support is necessary to motivate higher levels of deployment, depends — in part — on the future costs of both onshore and offshore wind.” The subsequent elicitation of wind energy experts found that there are “significant opportunities for cost reductions, but also underlying uncertainties.”

Specifically, wind energy experts suggest a likely average cost reduction of between 24% to 30% by 2030 and 35% to 41% by 2050 across the three wind applications studied — onshore wind, fixed-bottom offshore wind, and floating offshore wind. There is a further 10% chance that cost reductions could be more than 40% by 2030 and more than 50% by 2050. The fluctuation in levelized cost of energy (LCOE) — the predominant method for measuring an energy technology’s costs — is shown below.

lbnl1

It is this uncertainty, however, which is limiting experts’ ability to predict the degree to which wind energy will play in the global electricity mix in the coming decades. A review of long-term energy scenarios conducted by the Intergovernmental Panel on Climate Change (IPCC) predicted wind energy’s contribution to the global electricity mix reaching 13% to 14% in the median climate change mitigation scenario, but with a range of less than 5% to over 50%. Similar uncertainty is found in other scenarios as well: 6% to 15% in a IEA scenario, and 17% to 31% in a Global Wind Energy Council scenario.

As can be seen in the graph above, the majority of broader literature estimates a more measured LCOE decrease — but this could also be seen as underestimating the potential for cost reductions. Whereas the respondents to the elicitation survey are much more bullish about the potential for wind energy cost reductions. This uncertainty is even more prominent reports from the US Government, which are even more likely to present a pessimistic picture of possible wind energy cost reductions. This leads Berkeley Lab to one primary conclusion:

Though conservatism might be appropriate in some cases, and there are large uncertainties about future wind costs that must be acknowledged, one is still left with the view that the energy community may be under-estimating the potential for wind energy cost reductions.

Berkeley Lab conducted a much more extensive review of the study in a blog post on its website [], which goes further in-depth into the results of the survey, its potential flaws, and the arguments why the elicitation survey is not flawed. It’s worth a read, as is the study, which is available free to read from Nature Energy here.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s