A new research from Syracuse University and the University of California finds that wind energy is now price competitive with natural gas for electricity when accounting for the full private and social costs of each.
The research shows that wind energy comes within .35 cents per kWh when levelized over the 20-year life of a typical wind contract, compared on an equivalent basis to the full costs for natural gas-fired energy.
The analysis develops a new metric that incorporates long-term factors which are not included in the Department of Energy (DOE) numbers.
Accordingly, the study also reveals that the recently-expired Production Tax Credit for wind makes up for the lack of any mechanism to make fossil fuel generators pay for the cost of carbon emissions, Dedrick noted.
Current national-average estimates from the DOE are 8.7 cents per kilowatt-hour (kWh) for wind and 6.6 cents for gas-fired energy—making gas appear as a much cheaper alternative, Linden noted.
Incorporating the new metric into the analysis, however, shows that the tax credit is actually compensating for a market failure to price the future cost to society of carbon emissions, researchers said.