Commercial wind turbines onshore or offshore[1] have different associated costs. Whereas, offshore wind turbines or wind farms cost high as compared to their onshore counterparts. On the other hand, residential wind turbines cost a few thousand dollars per kilowatt capacity. For different types of installation locations, the cost differs accordingly. The onshore installations have lower installation and O&M costs whereas offshore installations have these costs higher than the turbine itself.
See the full Wind Turbine Cost Table
Moreover, there are different approaches to determining the costs of wind turbines. For instance, the Levelised Cost of Energy or the LCOE approach and others by just getting the costs of each component of a wind turbine. Where LCOE is the assumed total cost of building and operating an energy-generating plant per unit of energy generated over its lifetime. In short, the unit of LCOE is $/kWh. Certainly, wind farm developers and installers use this approach to design a feasible energy-generating system.
To make it easier to understand, we can first look at the components of LCOE of a wind turbine, one by one. Later from the results of NREL’s 2019 Cost of Wind Energy Review, we can find out the gross costs of different types of wind turbines. Likewise, different turbines like onshore, offshore, floating, distributed, and residential have different costs, we have segregated them in the table below.
Turbine Cost
Turbine cost includes the cost of the rotor, nacelle, and tower. Where the three blades with the center hub is the rotor that rotates from the power of the wind. For example, the average price of a land-based turbine single blade costs around $154,000[2]. Moreover, this means the whole rotor with 3 blades and a centre hub costs around $500,000 for the same turbine. On the other hand, the nacelle has a transmission, gear drive, brakes, yaw system and generator which gets rotational energy from the rotor. The components in the nacelle and overall unit cost 30-35%[3] of the total wind turbine cost. The tall towers on which the nacelle and rotor are fixed also have a major cost component. For instance, the average wind turbine tower cost around $200/kW. In short, for a turbine of 1 MW capacity, the tower cost is around $200,000.
Operation and Maintenance Cost or O&M Cost
The O&M cost components of a wind turbine comprise insurance, land rent, maintenance, repair, spare parts and administration. For home wind turbines, these costs are quite less but offshore and onshore wind turbine costs have a major share of O&M costs. On one hand, costs like insurance, rent and regular maintenance are mostly fixed and contract based. But, the costs of repair and spare parts are not predictable. For new turbines, O&M costs are less but increase with the life span of the wind turbine. For instance, in 2016, the average O&M cost in the U.S. per MW was $48000 per MW[4]. However, these costs are decreasing with time as developers are focusing on wind turbine designs requiring less maintenance, repairs and spares.
Soft or Financial Cost
These are the costs related to permitting, construction financing, commissioning, decommissioning and any contingencies. Soft costs of a wind turbine or a farm make up 5-10% of the total cost, depending on the location of the turbine. For offshore wind turbines, these costs are significant due to high-risk investments. For a wind farm developer, all of these costs are necessary to acknowledge as they are quite significant. Any future event requiring investment also makes part of the soft costs.
Balance of System or BOS Cost
BOS costs relate to most building or erecting of the turbine. Which are essential components of the wind turbine or farm both for home wind turbine costs and commercial wind turbine costs. These costs include project management costs, development costs, engineering management costs, site access & staging costs, foundation costs, assembly & installation costs, electrical infrastructure costs and grid connection costs. Additionally, for offshore wind turbines, substation costs, port costs, logistics & transportation costs are a part of BOS costs.
Where overall BOS costs account for 30%[5] of the total turbine cost for an onshore wind turbine in the US. In the US, transportation, and logistics costs around 3-8%[6] of the total turbine cost which is onshore. On the other hand, foundation costs are massive in offshore wind turbines. For a fixed bottom offshore 6.1 MW turbine, the BOS cost is more than $2100 per kW. On the contrary, for onshore wind turbines, the BOS cost is around $300 per kW. Offshore wind turbines cost more because of high BOS costs and this is where onshore wind turbines have an advantage.
Gross Wind Turbine Costs
| Onshore Wind Turbine 2.6MW($/kW) | Offshore Wind TurbineFixed Bed 6.1MW($/kW) | Offshore Wind TurbineFloating 6.1 MW($/kW | Commercial Wind TurbineDistributed 100 kW($/kW) | Residential Wind Turbine 20kW($/kW) | |
| Turbine capital cost | 991 | 1301 | 1301 | 2530 | 2575 |
| BOS Costs | 326 | 2131 | 3237 | 1770 | 3100 |
| Financial or Soft Costs | 120 | 645 | 790 | – | – |
| O&M Costs | 43 | 124 | 130 | 35 | 35 |
| Gross Lifetime Cost | 1480 | 4201 | 5458 | 4335 | 5710 |
Gross costs calculated from NREL 2019 Cost of Wind Energy Review[7]
From the table above, it is clear to understand the cost of different types of wind turbines at different locations. Here we can see that onshore wind turbine costs ($1480/kW) least and residential wind turbine costs ($5710/kW) maximum in terms of capacity installation.
At Last
So, from the explanations above, it is clear that wind turbine costs are relative to the size and location of the turbine. With the economies of scale and development of technology, these costs are reduced. This is the reason, limited installations, and awareness of residential wind turbines, make them the costliest option. However, government incentives for such home wind turbines can certainly cut the costs for homeowners. On the other hand, the high costs of offshore floating wind turbines are due to high BOS costs, where high generation in the deep sea justifies these costs.
References
[1] Wind Edition: https://www.windedition.com/category/onshore-wind/
[2] NREL: https://www.nrel.gov/docs/fy19osti/73585.pdf
[3] Windpowerengineering: https://www.windpowerengineering.com/understanding-costs-for-large-wind-turbine-drivetrains/
[5] NREL: https://www.nrel.gov/docs/fy19osti/72201.pdf
