Energy production costs:

RES vs. conventional sources Pierre Tardieu, Regulatory Affairs Advisor, EWEA

Around 700 members

from almost 60 countries

• Manufacturers with a leading share of the global wind

power market

• Component suppliers

• Research institutes

• National wind and renewable associations

• Developers

• Electricity providers

• Finance and insurance companies

• Consultants

• Contractors

This combined strength makes EWEA the world’s

largest and powerful wind energy network www.ewea.org/membership

EWEA’s leading members

Outline

1. Development of the European market

2. Cost of wind vs. conventional technologies

3. Support for renewables compared to support for

conventional energy

Cumulative wind power installations in the EU (GW)

12.9 17.3

23.1

28.5

34.4

40.8

48

56.7

65

75.2

85

94.3

106

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: EWEA

Annual onshore and offshore installations (MW)

4,377

5,743 5,186

5,749 6,454

7,086

8,648 8,109

9,695 8,964 8,790

10,729

51

170

276

90

90

93

318

373

575

883 874

1166

0

2000

4000

6000

8000

10000

12000

14000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Offshore onshore

Source: EWEA

Wind power share of total electricity consumption in EU

(7%) and in member states

0%

0%

0%

1%

1%

1%

2%

2%

3%

3%

4%

4%

4%

4%

4%

5%

5%

6%

6%

6%

6%

7%

7%

11%

13%

16%

17%

27%

0% 5% 10% 15% 20% 25% 30%

Sources: EWEA, Eurostat 2010

Installed power generating capacity per year in MW and

RES share (%)

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Peat Fuel oil Nuclear Coal Gas Geothermal CSP Waste Hydro Biomass PV Wind

RE

S (7

0%

)

Sources: Platts PowerVision 2012, EWEA, EPIA, ESTELA

Cost of wind vs. conventional energy

Cost of wind energy

Wind turbines and

installation

Lifetime of

project

Cost of

capital

Price of wind

turbines,

foundation, etc.

Rotor diameter and

other physical

characteristics

Site

characteristics

Capital

costs

Operation and

maintenance

costs

Total costs

per year

Annual energy

production

Cost of Energy

€/kWh

Evolution and future of Capital costs of wind power

onshore and offshore

-

500

1,000

1,500

2,000

2,500

3,000

3,500

4,00020

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

€/M

W

Onshore CAPEX (€/KW) Offshore Capex (€/kW)

Offshore Average Capex

3,470 €/kW

Onshore Average Capex

1,100 €/kW

Range of CAPEX for power generating technologies

Capital cost per technology (euro/kW)

Technology 2011 2020

Wind onshore 1,095-1825 803-1533

Wind offshore 2,263-4,307 1,460-2,555

Gas 584-730 584-730

Coal 584-1606 584-1606

Nuclear 1825-4088

Source: IEA, Energy Technology Perspectives 2012

Levelised cost of electricity from different generating

sources

Levelised cost of electricity (€/MWh)

Technology 2007 2020 2030

Wind Onshore 85 68 64

Wind Offshore 104 85 76

Coal 68 69 68

Gas 63 84 90

Nuclear 69 67 68

Source: European Commission (Joint Research Centre)

Short term expectations

• Wind energy investments (on and offshore) do not suffer

from unpredictable and volatile costs.

• To compare LCOE, risk on fuel and carbon price volatility

must be included.

• EWEA electricity cost calculator:

Risk factored-in: wind competitive in 2020

Risk not factored-in: wind competitive in 2030

• Trends:

• Onshore wind is moving towards competitiveness in

2016 (Bloomberg New Energy Finance)

• DONG Energy recently stated: offshore wind LCOE

could fall to 100€/MWh by 2020 from 150-160 today.

• Offshore cost reduction pathways could lead to 39%

cut in levelised cost of wind (Crown Estate)

Support for wind vs. conventional energy

Historical and current R&D support

Source: Clean Energy Progress report, OECD/IEA 2011

CEM countries: Australia, Brazil, Canada, China, Denmark, the European Commission, Finland, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Norway, Russia, South Africa, Spain, Sweden, the United Arab Emirates, the United Kingdom, and the United States.

Support for fossil fuels in EU20* RES in EU27 and global support

for wind energy in €bn

Biofuels

0

5

10

15

20

25

30

35

40

45

Global wind support EU20 Fossil Fuel subs EU27 RES support

Conclusions

• Onshore wind will edge towards competitiveness in the

next decade

• Offshore wind will eventually follow a similar curve

• In order to deliver this the industry needs stable legal

frameworks to make the necessary investments:

– Well designed support mechanisms;

– Level playing field and liberalised electricity market.

• Supporting renewables is an investment in our economy:

– 238 000 jobs in 2010

– € 32 Billion of contribution to the DGP

– € 8.8 Billion of exports

THANK YOU

www.ewea.org