Dive Brief:
- Wind is cost competitive with coal, natural gas and nuclear power plants in the Midwest, according to Morgan Stanley.
- In the Midwest, wind power purchase agreements are being signed at around $25/MWh, less than the variable cost of natural gas-fired plants at $30/MWh and well below the $60/MWh needed to justify building a gas plant.
Dive Insight:
“I’m not suggesting that nationwide, wind is at or below the economics of a gas plant, but we are seeing in the best locations that wind is becoming good business -- big business,” said Stephen Byrd, Morgan Stanley’s Head of North American Equity Research.
Even with the loss of the federal production tax credit, which expires at the end of the month, in certain areas with strong wind resources, wind will remain competitive with fossil-fueled generation. Also, wind technology continues to become more efficient.
