The Cost of Wind Energy
- Wind Energy is a hedge to rising fuel costs
- Wind Energy is competitive today with any new generation resource
- Wind Energy requires no water
- Wind Energy projects can be constructed in a shorter time frame than other plants
- Wind Energy projects can help utilities save the amount of natural gas they use, and the carbon emitted.
The Cost of Wind Energy in Tennessee
According to the Tennessee Valley Authority's latest Renewable Energy Assessment, wind prices in the state of Tennessee will vary between 7-11 cents/kWh depending on the wind resource which they are located. The price competes very well with the cost of natural gas, which currently ranges from 10-14 cents/kWh, the cost of new Nuclear power, which according to Progress Energy in Florida ranges between 11-13 cents/kWh, and depending on carbon legislation may lead to wind competiting with new coal plants. While energy efficiency is more often than not, the cheapest solution to future energy needs, it could very well be that wind energy is able to save Tennessee ratepayers money on their electric bill as it hedges against continued increase in fuel prices, provides a carbon free, water free energy resource, and when forecasted properly can help relieve the amount of fuel we use from more expensive power plants.
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| Cost of Wind Energy Compared to Other Sources |
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| Source: Black and Veatch, 2006 |
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| Cost of Energy Continues to Rise |
SaneBull Commodities and Futures |
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| Price of Coal, Source: EIA |
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Today's Price of Natural Gas
The widget above is the current price of Natural Gas on the market today. Natural gas is used predominantly as a peaking power source, which means it is only used when it is needed. This is because the price of natural gas tends to be very volatile and expensive. Natural Gas plants' ability to turn on and off so quickly mean that when the wind is blowing, if it is accurately forecasted, utilities can turn off their natural gas peakers, and save themselves, and their customers, money.
| The Weekly Price of Coal
The Energy Information Administration releases the current price of coal every other week. This report allows us to see the rising cost of using coal as a fuel. This does not take into account the uncertain future price of coal. There is an uncertain future price based on the discussion of carbon legislation which will help lead the United States into a carbon constrained world. Wind energy provides a carbon free, water free energy resource and when enough wind energy is on a system's grid, it is possible to ramp down coal plants based on the wind forecast. To do this, wind projects must be accurately forecasted and the utility must have made serious investments in wind energy.
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