Annual wind energy cost less than €1 per person, new report
A new Report found that the annual wind energy cost in Ireland amounts to less than one euro per person. The new cost-benefit analysis concluded that wind energy is great value for consumers. Wind energy not only drives down the price of electricity but also cuts carbon emissions.
The report – ‘Wind for a Euro: Cost-benefit analysis of wind energy in Ireland 2000-2020‘ – was produced by energy and utilities consultants Baringa. The authors inform that, for Irish consumers, the annual net cost of wind energy has come to less than €1 per person since 2000.
The authors analyzed Ireland’s electricity market from 2000 to 2020. They then simulated how that market would have behaved had there been no wind energy on the system.
This is the first time researchers have used historical data to carry out a wind energy cost-benefit analysis.
Wind energy cost driving down overall electricity prices
According to the Report, wind energy has delivered €2.3 billion in savings over the past twenty years on the wholesale electricity market. Wind energy has driven down prices for electricity consumers. It has also outweighed the total amount of funding the PSO levy provided to support wind energy.
According to Dr David Connolly, CEO of the Irish Wind Energy Association:
“For less than a euro a year wind energy has reduced CO2 emissions by 33 million tonnes and cut the amount spent on fossil fuels by €2.7 billion. That’s great value for money for electricity consumers.”
“Wind energy is pushing down the wholesale price of electricity and with the price of wind – both onshore and offshore – falling around the world this is a trend that is only going to improve.”
“And of course wind energy is playing a vital role in addressing climate change, which the Government has identified as a key policy priority that must be urgently addressed. This report confirms that wind isn’t just good for the environment, it’s good value for money.”
The Irish Wind Energy Association commissioned the Report.
Wind energy cost calculation included additional investments
The authors of the Report included both the financial support for wind energy as well as the cost of additional investment.
Specifically, investment in the electricity network plus the technical costs for accommodating wind energy’s variability on the grid.
According to the Irish Wind Energy Association:
“Against this were set the financial benefits of wind energy in fines avoided, reduced capacity payments to fossil fuel companies and – most importantly – the impact of wind energy on wholesale electricity prices.”
Many consumers unaware of wind energy’s impact on prices
Study leader, Dr Mark Turner, a Director at Baringa:
“While consumers generally understand a portion of the PSO levy on their electricity bill is used to support renewable energy they are less conscious of the role wind energy has in driving down the price of electricity.”
“Every day electricity generators, fossil fuel and renewable, compete against each other in an auction to provide power to the suppliers who sell it on to homes and businesses. The more wind energy on the system, the more it pushes out fossil fuel generators that are much more costly to run.”
“We used our advanced power market models to calculate how much wind energy is reducing the wholesale price of electricity and found this ranged from 5-20%, depending on the year.”
“As more wind energy is added, the savings typically increase, so the largest reductions are occurring right now across the years 2018, 2019 and 2020. These benefits will continue well into the future too, for as long as wind keeps generating energy. ”
Cumulative wind energy cost – €0.66 per person annually
Over two decades, the cumulative wind energy cost came to €63 million. In other words, just sixty-six cents (€0.66, $0.76, £0.58) per person per year.
Dr David Connolly added:
“For the price of a pint of milk wind energy has become a leader in Ireland’s fight against climate change while making us more energy independent and creating thousands of jobs.”
“As an industry, we’re focused on reducing the price of wind energy even more in coming years. There is enormous potential in developing Ireland’s incredible offshore wind energy resources and still huge opportunities for expanding the amount of renewable energy we can generate onshore.”
“With wind energy at its heart, there is no reason why we cannot, alongside solar, hydro and other renewables, be providing 70% of Ireland’s electricity by 2030.”
What is wind energy?
Market Business News produced this easy-to-understand video which explains what wind energy is.