EIA: Average US onshore wind construction cost has decreased

Average onshore wind construction costs for the Electric Reliability Council of Texas (ERCOT), which manages approximately 90% of Texas’s electric load, totalled US$1114/kW in 2019 and were less expensive than the US average for that year. ERCOT installed the most wind capacity of any US electricity market region in 2019 (3.5 GW) and also had the most total wind capacity (26 GW) as of December 2019. Favourable market conditions, wholesale prices, and geographic advantages contribute to lower construction costs in ERCOT, the EIA states.

In 2019, the average construction cost for wind capacity was lower in ERCOT than it was in neighbouring market regions Southwest Power Pool (SPP) and Midcontinent Independent System Operator (MISO). The average construction cost for wind in SPP, which manages the electric grid in all or parts of 14 states including northwest Texas, Oklahoma, Kansas, and Nebraska, was US$1426/kW. In MISO, which covers the Midwest US as well as parts of Arkansas, Mississippi, and Louisiana, the average construction cost for wind in 2019 was US$1637/kW. Average construction costs in both SPP and MISO were above the US average in 2019, the EIA reports.

Source: U.S. Energy Information Administration, Electric Generator Report.
Note: ERCOT is Electric Reliability Council of Texas; MISO is Midcontinent Independent System Operator; and SPP is Southwest Power Pool. 2013 data are not available for SPP.

All three market regions – ERCOT, SPP, and MISO – are in the Wind Belt, an area in the central part of the US where some of the country’s best wind resources and a large share of US wind capacity are located. Wind Belt states, such as New Mexico, Kansas, and Colorado, were among the least expensive in the US for constructing wind generating capacity from 2013 to 2019.

According to the EIA, like many states in the Wind Belt, California had significant wind capacity (5.9 GW) at the end of 2019. However, California had relatively high average wind plant construction costs, averaging US$2310/kW for new wind installations between 2013 and 2019. The high costs could be driven by a variety of factors, including state policies and regulations, land use restrictions, and difficulties in developing wind projects.

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