A key issue debated about wind power is its ability to scale to meet a
substantial portion of the world's energy demand. There are significant
economic, technical, and ecological issues about the large-scale use of wind
power that may limit its ability to replace other forms of energy production.
Most forms of electricity production also involve such trade-offs, and many are
also not capable of replacing all other types of production for various reasons.
A key issue in the application of wind energy to replace substantial amounts of
other electrical production is
intermittency; see the section below on Economics and Feasibility. At
present, it is unclear whether wind energy will eventually be sufficient to
replace other forms of electricity production, but this does not mean wind
energy cannot be a significant source of clean electrical production on a scale
comparable to or greater than other technologies, such as
hydropower. Most electrical grids use a mix of different generation types
(baseload generating capacity and peaking capacity) to match demand cycles by
attempting to match the variable nature of demand to the most economic form of
production; with the exception of hydropower, most types of production capacity
are not used for all production (hydropower usage is limited by the presence of
appropriate geographical sites). For example, nuclear power is effective as a
baseload technology, but cannot be easily varied in short timeframes, and gas
turbine plants are most economically used as peaking capacity; coal generation
is primarily considered appropriate for baseload generation with some capacity
to cycle to meet demand.
A significant part of the debate about the potential for wind energy to
substitute for other electric production sources is the level of penetration.
With the exception of Denmark, no countries or electrical systems produce more
than 10% from wind energy, and most are below 2%. While the feasibility of
integrating much higher levels (beyond 25%) is debated, significantly more wind
energy could be produced worldwide before these issues become significant. In
Denmark, wind power now accounts for close to 20% of electricity consumption and
a recent poll of Danes show that 90% want more wind power installed.
Wind's long-term theoretical potential is much greater than current
world energy consumption. The most comprehensive study to date found the
potential of wind power on land and near-shore to be 72
Mtoe), or over five times the world's current energy use and 40 times the
current electricity use. The potential takes into account only locations with
Class 3 (mean annual wind speeds ≥ 6.9 m/s at 80 m) or better wind regimes,
which includes the locations suitable for low-cost (0.03–0.04 $/kWh) wind power
generation and is in that sense conservative. It assumes 6 turbines per square
km for 77-m diameter, 1.5 MW turbines on roughly 13% of the total global land
area (though that land would also be available for other compatible uses such as
farming). This potential assumes a capacity factor of 48% and does not take into
account the practicality of reaching the windy sites, of transmission (including
'choke' points), of competing land uses, of transporting power over large
distances, or of switching to wind power.
To determine the more realistic technical potential it is essential to
estimate how large a fraction of this land could be made available to wind
power. In the 2001 IPCC report, it is assumed that a use of 4% – 10% of that
land area would be practical. Even so, the potential comfortably exceeds current
world electricity demand.
Although the theoretical potential is vast, the amount of production that
could be economically viable depends on a number of exogenous and endogenous
factors, including the cost of other sources of electricity and the future cost
of wind energy farms.
Offshore resources experience mean wind speeds about 90% greater than those
on land, so offshore resources could contribute about seven times more energy
than land. This number could also increase with higher altitude or airborne wind
To meet energy demands worldwide in the future in a sustainable way, many
more turbines will have to be installed. This will affect more people and
wildlife habitat. See the section below on ecology and pollution.
Economics and feasibility
Some of the over 6,000 wind turbines at
, in California. Developed during a period of tax incentives in
the 1980s, this wind farm has more turbines than any other in the United States,
producing about 125 MW. Considered largely obsolete, these turbines produce only
a few tens of kilowatts each.
Wind energy in many jurisdictions receives some financial or other support to
encourage its development. A key issue is the comparison to other forms of
energy production, and their total cost. Two main points of discussion arise:
externalities for various sources of electricity, including wind. Wind
energy benefits from subsidies of various kinds in many jurisdictions, either to
increase its attractiveness, or to compensate for subsidies received by other
forms of production or which have significant negative externalities.
Most forms of energy production create some form of
negative externality: costs that are not paid by the producer or consumer of
the good. For electric production, the most significant externality is
pollution, which imposes costs on society in the form of increased health
expenses, reduced agricultural productivity, and other problems. Significantly,
carbon dioxide, a
greenhouse gas produced when using fossil fuels for electricity production,
may impose costs on society in the form of
global warming. Few mechanisms currently exist to impose (or internalise)
these external costs in a consistent way between various industries or
technologies, and the total cost is highly uncertain. Other significant
externalities can include national security expenditures to ensure access to
fossil fuels, remediation of polluted sites, destruction of wild habitat, loss
of scenery/tourism, etc.
Wind energy supporters argue that, once external costs and subsidies to other
forms of electrical production are accounted for, wind energy is amongst the
most cost-effective forms of electrical production. Critics may debate the level
of subsidies required or existing, the "cost" of pollution externalities, and
the uncertain financial returns to wind projects — that is, the all-in cost of
wind energy compared to other technologies. Intermittency and other
characteristics of wind energy also have costs that may rise with higher levels
of penetration, and may change the cost-benefit ratio.
- Conventional and
nuclear power plants receive substantial direct and indirect governmental
subsidies. If a comparison is made on total production costs (including
subsidies), wind energy may be competitive compared to many other sources. If
costs (environmental, health, etc.) are taken into account, wind energy
would be competitive in many more cases. Furthermore, wind energy costs have
generally decreased due to technology development and scale enlargement.
However, the cost of other capital intensive generation technologies, such as
nuclear and fossil fueled plants, is also subject to cost reductions due to
economies of scale and technological improvements.
- Nuclear power plants generally receive special immunity from the disasters
they may cause, which prevents victims from recovering the cost of their
continued health care from those responsible, even in the case of criminal
malfeasance. In many cases, nuclear plants are owned directly by governments or
substantially supported by them. In both cases, nuclear plants benefit from a
lower cost of capital and lower perceived risk, as governments take on the risk
charge directly. This is a form of indirect
subsidy, although the size of this subsidy is difficult to ascertain
- To compete with traditional sources of energy, wind power often receives
financial incentives. In the United States, wind power receives a tax credit for
kilowatt-hour produced; at 1.9 cents per kilowatt-hour in 2006, the credit
has a yearly inflationary adjustment. Another tax benefit is
accelerated depreciation. Many American states also provide incentives, such
as exemption from property tax, mandated purchases, and additional markets for
"green credits." Countries such as
Germany also provide other incentives for wind turbine construction, such as
tax credits or minimum purchase prices for wind generation, with assured grid
access (sometimes referred to as feed-in tariffs). These feed-in tariffs are
typically set well above average electricity prices.
- Many potential sites for wind farms are far from demand centers, requiring
substantially more money to construct new transmission lines and substations.
Intermittency and the non-dispatchable nature of wind energy production can
raise costs for regulation, incremental operating reserve, and (at high
penetration levels) could require demand-side management or storage solutions.
- Since the primary cost of producing wind energy is construction and there
are no fuel costs, the average cost of wind energy per unit of production is
dependent on a few key assumptions, such as the cost of capital and years of
assumed service. The
marginal cost of wind energy once a plant is constructed is close to zero.
- The cost of wind energy production has fallen rapidly since the early 1980s,
primarily due to technological improvements, although the cost of construction
materials (particularly metals) and the increased demand for turbine components
caused price increases in 2005-06. Many expect further reductions in the cost of
wind energy through improved technology, better forecasting, and increased
scale. Since the
cost of capital plays a large part in projected cost, risk (as perceived by
investors) will affect projected costs per unit of electricity.
- Apart from regulatory issues and externalities, decisions to invest in wind
energy will also depend on the cost of alternative sources of energy. Natural
gas, oil and coal prices, the main production technologies with significant fuel
costs, will therefore also be a determinant in the choice of the level of wind
- The commercial viability of wind power also depends on the pricing regime
for power producers. Electricity prices are highly regulated worldwide, and in
many locations may not reflect the full cost of production, let alone indirect
subsidies or negative externalities. Certain jurisdictions or customers may
enter into long-term pricing contracts for wind to reduce the risk of future
pricing changes, thereby ensuring more stable returns for projects at the
development stage. These may take the form of standard offer contracts, whereby
the system operator undertakes to purchase power from wind at a fixed price for
a certain period (perhaps up to a limit); these prices may be different than
purchase prices from other sources, and even incorporate an implicit subsidy.
- In jurisdictions where the price paid to producers for electricity is based
on market mechanisms, revenue for all producers per unit is higher when their
production coincides with periods of higher prices. The profitability of wind
farms will therefore be higher if their production schedule coincides with these
periods (generally, high demand / low supply situations). If wind represents a
significant portion of supply, average revenue per unit of production may be
lower as more expensive and less-efficient forms of generation, which typically
set revenue levels, are displaced from
economic dispatch. This may be of particular concern if the output of many
wind plants in a market have strong temporal correlation. In economic terms, the
marginal revenue of the wind sector as penetration increases may diminish.
Intermittency and variability
Electricity generated from wind power can be highly variable at several
different timescales: from hour to hour, daily, and seasonally. Annual variation
also exists, but is not as significant. This variability can present substantial
challenges to incorporating large amounts of wind power into a grid system,
since to maintain grid stability, energy supply and demand must remain in
While the negative effects of intermittency have to be considered in the
economics of power generation, wind is unlikely to suffer momentary failure of
large amounts of generation, which may be a concern with some traditional power
plants. In this sense, it may be more reliable (albeit variable) due to the
distributed nature of generation.
Grid operators routinely control the supply of electricity by cycling
generating plants on or off at different timescales. Most grids also have some
degree of control over demand, through either
demand management or
load shedding. Management of either supply or demand has economic
implications for suppliers, consumers and grid operators but is already
Variability of wind output creates a challenge to integrating high levels of
wind into energy grids based on existing operating procedures. Critics of wind
energy argue that methods to manage variability increase the total cost of wind
energy production substantially at high levels of penetration, while supporters
note that tools to manage variable energy sources already exist and are
economical, given the other advantages of wind energy. Supporters note that the
variability of the grid due to the failure of power stations themselves, or the
sudden change of loads, exceeds the likely rate of change of even very large
wind power penetrations.
There is no generally accepted "maximum" level of wind penetration, and
practical limitations will depend on the configuration of existing generating
plants, pricing mechanisms, capacity for storage or demand management, and other
A number of studies for various locations have indicated that up to 20%
(stated as the proportion of wind nameplate capacity to peak energy demand) may
be incorporated with minimal difficulty. These studies have generally been for
locations with reasonable geographic diversity of wind; suitable generation
profile (such as some degree of dispatchable energy and particularly hydropower
with storage capacity); existing or contemplated demand management; and
interconnection/links into a larger grid area allowing for import and export of
electricity when needed. Beyond this level, there are few technical reasons why
more wind power could not be incorporated, but the economic implications become
more significant and other solutions may be preferred.
At present, very few locations have penetration of wind energy above 5%, and
only Denmark is in the range of this 20% penetration level. Discussion about the
feasibility of wind penetration beyond the level of 20% is, at present, largely
One potential means of increasing the amount of usable wind energy in a given
electrical system (the penetration) is to make use of energy storage systems.
Effectively, "surplus" wind energy would be used to store electricity in some
usable form, such as
pumped storage hydroelectricity. Storage of electricity would effectively
arbitrage between the cost of electricity at periods of high supply and low
demand, and the higher cost at periods of high demand and low supply. The
potential revenue from this arbitrage must be balanced against the installation
cost of storage facilities and efficiency losses.
Many different technologies exist to store usable electric energy, including
flywheel energy storage, and others. For large energy grids, pumped storage
hydroelectric has been implemented at large scale, but the number of sites
suitable for such facilities is limited. Most other technologies are currently
relatively expensive or unproven at large scale, although they are used in
specialized applications and may prove feasible in future.
Other potential solutions in future may depend on the development and
deployment of complementary technologies, such as
plug-in hybrid vehicles and