Over the next five years, Bloomberg New Energy Finance (BNEF) expects that wind energy will be competitive with natural gas. Research showed that the cost of wind-generated electricity has fallen 14% for every doubling of installation capacity. Continued performance improvements and cost reductions, combined with better materials and manufacturing, larger turbines and more experience in plant operations all factor into the surge in wind electricity cost competitiveness. BNEF’s research shows that these factors will drive the cost of wind down further, and they expect wind to be competitive with energy produced from combined-cycle gas turbines by 2016.
Natural gas and wind power often have a symbiotic relationship, and natural gas can offer a back-up plan for when the wind does not blow. However, gas prices have dropped substantially, which has effectively pushed out wind developers in large shale gas markets like Texas. Despite this, the industry continues to move on and develop at cost parity with historically low natural gas prices.