Is wind power holding electricity costs down?
I found the conclusion of the article by Brennan Louw on renewable energy and electricity costs intriguing, and decided to look a bit deeper into the data myself. Looking at the Department of Energy data for all 50 states, there is very strong evidence to suggest that wind is helping to hold electricity costs down. Here is what the data show:
For the 30 states with the least installed wind capacity and the District of Columbia, a group for which wind only accounted for 0.3% of electricity produced in 2010, electric rates increased by an average of 26.74% between 2005 and 2010. For the 20 states that produced the largest share of their electricity from wind (ranging from 2% to 15.4%) in 2010, consumer electricity prices increased an average of only 15.72%.
When one looks at the top wind states, the difference is even more striking. For the 40 states with least wind installed and DC, prices rose by an average of 25%. For the top 10 states in wind generation (with wind providing between 5% and 15% of electricity), electricity prices increased an average of only 11%, or less than half as much as in the 40 low wind use states.
Methodology: Top 20 wind rankings for 2010 taken from Table 2 here: http://eetd.lbl.gov/ea/emp/
Caveat: There are many factors that influence the price of electricity, so this isn't necessarily proof that more wind will automatically lead to lower prices, although others have found a causal connection for how wind drives electricity prices down: http://blogs.wsj.com/
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