Montana Environmental Information Center

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Cost of Wind vs. Fossil Fuels

In Montana, wind energy is cost-competitive with fossil fuels, especially coal. In fact, wind energy is less much less expensive than coal for customers of NorthWestern Energy – the state’s largest utility. The graph below comes from data from the Montana Public Service Commission and it compares the costs of various resources in NorthWestern’s portfolio. The Judith Gap wind facility is about $32.11 per megawatt-hour (or 3.1 cents per kilowatt-hour) while the coal-fired Colstrip Unit 4 is about $64.55 per megawatt-hour or (6.4 cents per kilowatt hour).

Source: Montana Public Service Commission

Nationally, financial analyst firm Lazard found in December 2016 unsubsidized wind projects costing between $32 and $62 per megawatt-hour while coal cost between $57 and $148 per megawatt-hour.

Why are Wind Costs are Decreasing?

Wind energy technology has improved significantly in recent years, resulting in turbines that are larger and produce energy at less cost. Increased turbine hub height, rotor diameter, and nameplate capacity have allowed more energy to be produced per turbine than ever before. The U.S. Department of Energy reports the average nameplate capacity for a newly installed wind turbine in 2015 was 2.0 megawatts, an 180% increase since 1999. In addition to generating more energy at less overall cost, larger turbines have made it possible to economically generate energy in areas with increasingly lower average wind speeds.

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