August 14, 2023
The average cost of building 1 MW of wind generation capacity has increased almost 40% since 2020 from over USD $850,000/MW to almost $1,200,000/MW. By primary component, the gearbox and generator costs are up 40% and 70% respectively while the cost of the rotor blades has declined slightly. To compete globally, Europe must ensure materials can be procured economically and increase manufacturing investment in the wind industry.
The main minerals used in the wind industry beyond steel include copper, zinc, manganese, chromium, nickel, molybdenum and rare earths. The price of each of these metals increased between January 2020 and March 2023, ranging from a 23% price increase for zinc to a 285% price increase for molybdenum. The average price increase of these seven metals over the period is 93%. The cost of steel has also jumped by double and even triple.
Turbine manufacturers faced huge losses in 2022 due to project delays delaying resulting from delivery problems and rising cost of raw materials. As these unforeseen factors were not priced into long-term contracts with customers, wind turbine manufacturers now find themselves dealing with unexpected costs at a time when they should be making the investments needed to satisfy growing demand. However, Incorrys expects raw material prices to stabilized and for wind capacity to increase annually by a minimum of 10% through 2030.
1.Ferris N.(2023, April, 25), Data insight: the cost of a wind turbine has increased by 38% in two years, retrieved from https://www.energymonitor.ai/tech/renewables/data-insight-the-cost-of-a-wind-turbine-has-increased-by-38-in-two-years/
2.Sonja van Renssen (2023, April, 13), EU: Undersubscribed renewables auctions call for government action, retrieved from https://www.energymonitor.ai/finance/regulation-policy/eu-undersubscribed-renewables-auctions-call-for-government-action/