U.S. onshore wind construction costs declined 27% from 2013-19

Construction costs for U.S. onshore wind generators declined by 27% from 2013-2019, according to data from the U.S. Energy Information Administration. But new guidance from Wood Mackenzie signals turbulent costs over the next year and a half.

The average construction cost per kilowatt fell from $1,895 in 2013 to $1,391 in 2019. The report acknowledges that wind capacity and construction costs vary significantly by region.

Average constructions costs for onshore wind generators in the ERCOT region were $1,114/kW in 2019 – lower than the national average of $1,391. ERCOT added 3.5 gigawatts of wind capacity that year, the most of any region, according to EIA.

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Turbulent prices for next 12-18 months

A new report from Wood Mackenzie estimated that wind turbine prices could increase by up to 10% over the next 12-18 months. Rising prices for steel, copper, aluminum, and fiber, as well as a four-fold increase in logistics costs, are to blame.

Wood Mackenzie reports that companies such as Vestas, SGRE, and Nordex have been forced to explore alternative supply hubs due to ongoing trade disputes between the U.S. and China.

“Turbine OEMs and component suppliers face a double whammy of cost increases and demand softening over the coming two years due to the US PTC (Production Tax Credit) and China feed-in-tariff (FiT) phase-outs,” said Shashi Barla, a Wood Mackenzie principal analyst. “Despite this rise in costs, we expect turbine prices to return to normal levels by the end of 2022.”

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The report warned that supply chain bottlenecks for imported materials will emerge over the next 4-5 years, forcing OEMs to adopt next-generation technologies and materials.

Source: Renewable Energy