Wind energy economics

The economics of wind energy have improved rapidly in the past few years, with improvements in machine performance and increases in size both contributing to reduce costs. These trends are examined and future costs assessed. It is argued that wind energy has a higher value than that of centralised plant, since it is fed into the low voltage distribution network and it follows that the price of wind energy is converging with its value. The paper also includes a brief review of the capacity credit of wind plant and an assessment of the cost penalties which are incurred due to the need to hold extra plant on part load. These penalties are shown to be small. (author)