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While 2023 was a relatively quiet year for new wind energy deployment in the United States, the sector continues to show growth, solid performance, expanding supply chains and attractive pricing, according to a report prepared for the U.S. Department of Energy (DOE) by Lawrence Berkeley National Laboratory (Berkeley Lab).

With electricity retail prices ranging from less than $20 to more than $40 per megawatt-hour (MWh) for newly built projects, the cost of wind energy falls far short of its value to the grid, health and climate. “Wind energy prices — particularly in the central United States — remain attractive, even though they have been rising in recent years,” said Ryan Wiser, a senior scientist in Berkeley Lab’s Energy Technologies Area. “When you factor in the health and climate benefits of wind energy, the economics get even better,” he added.

Key findings from the annual Land-Based Wind Market Report include:

• Wind energy is an important part of the electricity supply. Wind energy deployment in the U.S. was relatively low in 2023, totaling 6.5 gigawatts (GW) and requiring $10.8 billion in investment. Still, wind contributed 10% of the nation’s electricity supply and a whopping 37% to the Southwest Power Pool. A total of 150 GW of wind energy was installed in the United States by the end of 2023. A record 366 GW of wind energy is seeking transmission interconnection.

• Wind turbines are getting bigger, which is growing the wind energy market. Improved plant performance in recent decades has been driven by larger turbines mounted on taller towers and with longer blades. In 2013, no turbine had rotors 115 meters or larger in diameter, while 98% of newly installed turbines by 2023 will have such rotors.

• Wind energy prices have risen but remain attractive to buyers. Wind power purchase agreement prices have been rising since about 2018, with recent ranges from less than $20 per MWh to more than $40 per MWh, depending on the region and other details. These prices, made possible in part by federal tax support, are comparable to recent solar sales prices and to the expected future fuel costs of gas-fired generation.

• Wind’s value proposition includes benefits for the grid and society. The value of wind in wholesale electricity markets is influenced by the location of wind plants, their hourly output profiles, and how those characteristics correlate with real-time electricity prices and capacity markets. Wind’s market value declined in 2023, following a decline in the price of natural gas. Wind also reduces carbon dioxide, nitrogen oxides, and sulfur dioxide emissions in the power sector. These reductions, in turn, provide public health and climate benefits that are greater than the value of wind in the grid system. The combination of all three values ​​($183 per MWh) significantly exceeded the average cost of wind power in 2023.

• The Inflation Reduction Act has created new optimism for supply chain expansion. Domestic production of towers and nacelles was strong in 2023, while blade production has begun to increase after several years of decline. The Inflation Reduction Act for the first time includes production-based tax credits for domestic production of key wind components such as nacelles, towers and blades; it also expanded the wind deployment tax credit, including a 10% bonus for projects that meet domestic content requirements. As a result, there have been at least 15 announcements of manufacturing facilities planning to open, reopen or expand to serve the onshore wind industry.

• Energy analysts predict a revival of wind energy deployment in the coming years. With a long-term extension of wind tax credits, along with opportunities for wind plants to earn two 10% bonus credits, analysts expect 2023 to be the low point for wind deployment. Forecasts for wind deployment grow to an average of more than 15 GW per year from 2026 through 2028.

Berkeley Lab’s contributions to this report were funded by the Wind Energy Technologies Office of the U.S. Department of Energy.

Additional information:

The full Land-Based Wind Market Report: 2024 Edition, a presentation slide deck summarizing the report, several interactive data visualizations, and an Excel workbook containing the data presented in the report can be downloaded from windreport.lbl.gov. Companion reports on offshore wind and distributed wind are also available from the Department of Energy.

The U.S. Department of Energy press release regarding this research is available at https://www.energy.gov/eere/wind/wind-energy-market-reports.

Courtesy of Lawrence Berkeley National Laboratory (Berkeley Lab).