A Huge Utility Says Wind Power Now Costs Less Than Fossil Fuels
Wind is now a third cheaper than coal, a leading utility says.
For decades we’ve been told by politicians and fossil fuel companies that clean energy is an expensive luxury incapable of competing with good ol’ coal, gas, and oil. And, if you didn't count the massive health and environmental costs of mining and burning those fossil fuels, that was mostly correct. But over the past few years, the technology has improved, mass manufacturing has brought costs down and renewable energy sources like wind became drastically cheaper. So much so, that one of Europe’s largest utilities recently declared wind to be the most inexpensive energy source of all.
“It is clear more and more that our product [wind energy] is good,” João Manso Neto, head of renewables for Portugal’s EDP, told analysts in London. “Not only because it’s green…but because it’s more competitive, it’s cheaper.”
EDP calculated that wind was one-third cheaper than coal and 20 percent cheaper than gas. This is remarkable, especially because these figures come from an energy giant that profits from coal, gas, hydro and renewables. In other words, EDP has no incentive to exaggerate the benefit of renewable energy.
That puts EDP directly at odds with organizations like Americans for Prosperity, an advocacy group funded in part by the oil billionaire Koch brothers, which is now trying to kill clean energy laws across the US. “As an energy source,” AFP wrote recently to Congress, “wind cannot stand alone. Other, more reliable sources of energy such as natural gas, coal, nuclear, and hydro are needed to pick up the slack when the wind does not blow. This means there are very little to no savings from wind production.”
EDP—and the facts—tell a different story. “We see that renewables globally will be the main engine of growth” in new energy supply by 2020, Neto told analysts. “And within renewables, wind onshore is clearly the leader.” He diplomatically explained that for people “less educated” in the economics of electricity, wind might seem “very expensive.” But in his opinion, the technology’s rapidly falling cost over recent years means, “wind is not only competitive, but it’s prepared to compete.”
So that settles things, right? Well, sort of. A surge of renewables in recent years has helped wipe half a trillion Euros off the balance sheets of European utilities invested heavily in coal, nuclear and gas. But wind, solar and other clean sources only provide 8.5 percent of the planet’s electricity. Still, as Bloomberg New Energy Finance’s Ethan Zindler said recently, “this should earn [clean energy] the right to not be called 'alternative' anymore.” If utilities like EDP are right, after all, then cleaner and cheaper energy “is the future.”