Installed wind capacity worldwide has grown rapidly over the past decade, as countries search for environmentally friendly sources of energy. Driven by favourable public support mechanisms, unit costs of production have dropped substantially over the past 20 years, partly due to better siting and improved technology. In most locales, electricity from wind is still more costly to produce than power from traditional sources, but it is becoming competitive in some regions.
The intermittency of wind, and the subsequent challenges of integrating wind power into transmission grids, is recognized as the single biggest challenge for the development of wind energy. Experience in Europe indicates that the costs of integrating wind into the grid are likely in the range of 5 to 30 per cent of the costs of generation. But methodologies for estimating costs of integration have not been standardized; estimates vary, and further research is required.
In jurisdictions where installed wind capacity has grown rapidly over the past decade, public policies have played a critical role in this growth.
Public opinion favours the use of wind power in the abstract, but local opposition can be strong to specific proposals, as it can be to almost any kind of industrial development. Once wind farms have been operating for some time, however, public acceptance seems to grow again.
Strong market growth in renewable power has never occurred in Organisation for Economic Co-operation and Development (OECD) countries with only one policy instrument. In jurisdictions where installed wind capacity has grown rapidly over the past decade, public policies have played a critical role in this growth. Leading wind regions, such as Denmark and Germany, have made promotion of wind energy a focus of public policy. They have therefore used a suite of policy instruments—some affecting the supply side, others the demand side; some in the development stages and others during implementation.
Given current and proposed policy support and technological improvements, installed wind capacity will continue to grow worldwide. But there are practical limits to the amount of electricity that wind turbines can contribute to an electricity grid. Wind farm sites with adequate characteristics are scarce. A satisfactory site must have a wind resource that enables wind turbines to consistently produce a high output of power. The site must also be sufficiently close to users of the power to justify the costs of building and using transmission lines. Danish and German experience indicates that as the share of power generation from wind approaches 20 per cent in a region, both transmission and backup requirements become more costly. This may limit the wind fraction of a mixed system because a large amount of idle backup capacity is an inefficient use of scarce resources.
• Electricity from wind tends to be more costly to produce than electricity from traditional sources, but is becoming competitive in some regions.
• Intermittency is the single biggest challenge for the development of wind energy.
• Public opinion favours the use of wind power in the abstract, but the initial stages of wind development tend to invite the “not in my backyard” (NIMBY) syndrome, although this may abate following installation.
• A variety of policy instruments is required to assist the market growth of wind energy.
• There are practical limits to the amount of electricity that wind turbines can contribute to an electricity grid based on the availability of sites with the desirable conditions and grid integration.