FAQs
Isn't wind power really expensive?
No. The cost of generating electricity from the wind has fallen
dramatically over the past few years. And energy from the
wind will become even cheaper in the future as greater experience
is gained in manufacturing and developing this relatively
new technology. When the full costs of the environmental
damage caused by fossil fuels or nuclear power are taken
into account, wind power is an even better buy.
For example, it has been estimated that if the cost of environmental
damage were included, the price of electricity from coal would
be three times higher than electricity from the wind. The planned
carbon tax (to be introduced in 2008) tries to internalise
these negative externalities and will make fossil-fuelled forms
of generation less attractive and more expensive. In an NZ
Herald article it was estimated that a tax of $15 a tonne of
carbon dioxide would add 0.8c a kilowatt hour to the cost of
gas-fired electricity generation, and 1.5c/kWh to coal-fired
generation. Climate change consultant Stuart Frazer thinks: "this
alone should have a positive effect on the viability of wind
power". In other countries, the full costs of nuclear
power, including dealing with highly radioactive waste and
decommissioning of old plants, are still not included in the
price of electricity.
The average unit cost of producing electricity from wind
is somewhere between 6c and 8c/kWh according to an estimation
in the publication New
Zealand Energy Outlook to 2025 from the Ministry of Economic Development. This price is comparable
to other forms of new power generation, such as hydro and
coal.
Meridian's CEO, Keith Turner noted in the NZ Herald (4. Nov
2004) that NZ could generate 2,500-3,000 GWh (equivalent
to 625 - 750MW of installed capacity) of electricity from
the wind at prices of 6c/kWh or even lower.
When the Maui gas field runs dry in the near future the costs
of gas based electricity generation will inevitably rise
and wind energy may become even more competitive.
Notes:
(1)nzherald.co.nz/business/businessstorydisplay.cfm?storyID=3586235 (2)
www.windenergy.org.nz/news/articles.htm
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