Providing affordable power for both domestic and business consumers has always been a key objective but has become even more important since the global financial crisis of 2008. We take a look at a Royal Academy of Engineering report that puts the UK’s wind commitment under the financial spotlight.
The cost of wind energy is critical to its viability to deliver overall energy policy objectives. Providing affordable power for both domestic and business consumers has always been a key objective but has become even more important since the global financial crisis of 2008. The price of electricity has an impact on business and industry and, therefore an impact on economic growth. Rising fuel bills set against a general increase in the cost of living have forced energy prices to the top of the political agenda, and this looks set to be one of the major issues in the 2015 general election.
The cost or price of any particular generation technology can be considered from a number of different perspectives. Conclusions might be different depending on whether you are a developer taking an investment decision, the government deciding on the market structure and regulatory regime, or a final consumer of energy.
There are, inevitably, trade-offs between price to the consumer, effect on the national economy, carbon footprint and security of supply. While renewables represented a small fraction of the total electricity consumption, not all of these issues mattered, but as the proportion of wind energy increases, they all become significant.
Levelised costs
Discussion on the comparative economics of different types of generating technologies typically begins with levelised costs of electricity (LCOE). This approach attempts to compare the costs of each different technology in as uniform a way as possible. The results give a cost (or a range of costs) per unit of electricity for each technology and are a way of comparing one generating technology against another.
