Chart: Wind turbine prices surged to decade high in 2022

Surging commodity prices have reversed a trend of falling costs, but wind power remains one of the cheapest — and cleanest — forms of electricity generation around.
By Dan McCarthy, Eric Wesoff

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Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format.

After a decade of dependable cost declines, wind turbines — and the grid power they generate — are getting more expensive. Despite the almost terawatt of wind power installed worldwide, commodity costs and supply-chain perturbations are proving a more powerful force than the price-reducing magic of learning curves and economies of scale.

While wind turbine prices have fallen steadily from $1,800 per kilowatt in 2008 to $770 to $850 per kilowatt in 2021, data from GlobalData shows that the average per-megawatt cost of a wind turbine has increased by 38 percent over the last two years. Turbines account for roughly half of the total cost of a wind project. 

Wind power is not alone in this price trend reversal; every major source of electricity, including conventional fossil power, is also experiencing a spike in the costs of labor, land leases, components and capital. The phenomenon is being driven by global supply-chain woes, the continuing repercussions of the Covid-19 pandemic, and the rising price of fossil fuels and commodity minerals.

For wind power hardware manufacturing specifically, costs rise when there is an increase in the price of commodities such as steel (used in the tower), as well as the copper, zinc, manganese, chromium, nickel, molybdenum and rare earths used in the gearbox, generator and metallurgy of the tower.

The price of these critical metals increased significantly between January 2020 and March 2023, according to Energy Monitor, ranging from a 23 percent price increase for zinc to a 285 percent price increase for molybdenum.” As a certain famous wager has shown, commodity prices tend to fall over time, but that doesn’t change the fact that short-term spikes can make it harder to build projects.

But even with these increases, wind power remains among the cheapest — and cleanest — forms of electricity generation available.

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Dan McCarthy is news editor at Canary Media.

Eric Wesoff is the executive director at Canary Media.