Wind energy is today the most economical technology
The latest auctions have evidenced the growing competiveness of wind. Around 50 countries in the world already attribute renewable capacity through auctions, and in Europe for example, it is the main system.
Record prices have been reached in auctions held in 2017. For example, Mexico will generate the cheapest energy since the last wind auction (held in November 2017) that closed with a record price of $ 17 / MWH. In Europe, wind energy auctions, both onshore and offshore, have also reached record lows.
In Spain, all renewable capacity was awarded in 2017 without a premium (although with an assured land price). In Germany, in April 2017, marine wind farms without a premium were awarded for the first time in history.
Another indisputable proof of the competitiveness of wind power is the rise of so-called corporate PPAs (power purchase agreements). It is increasingly common for companies to directly supply and secure their energy needs, from renewable plants. Corporate PPAs allow large energy consumers to close a supply of green power at a competitive price.
According to Bloomberg New Energy Finance, a record number of corporate PPAs were signed in 2017 (contracts corresponding to 5.4 GW of renewable capacity, 27% more than in 2016).
Wind energy is not only cheaper to install, but it also reduces the final consumer’s electricity bill. This occurs because when the wind blows and wind generation increases, the production of coal-fired power plants or gas plants can be reduced, which when using fossil fuels, increase the price of the wholesale market (so-called pool).
Therefore, in countries with high wind penetration such as Spain, wholesale electricity prices are drastically reduced on the windiest days. For example, the months of December 2017 and January of 2018 have been the windiest in recent years, allowing wind power to be the first technology in the electrical system (accounting for almost 25% of the total).
According to the Spanish Wind Association (AEE), without this wind contribution, the price of the electricity market would have been about €20 / MWH higher. During 2017, wind power could have reduced the price of the pool by up to € 12 / MWH, according to the AEE.