When wind farms become cheaper to own and operate than natural gas plants, it should excite technology managers.
The US Department of Energy released a report that looks back on wind power in the US in 2018, and analysis shows that the cost of owning and operating a wind farm has fallen below the cost of buying fuel for an equivalent natural gas plant.
One of the main reasons for these findings is the technology behind wind turbines. In 2008 there were no turbines in the US with 100m rotors, whereas 99 percent of rotors in 2018 were over 100m. The turbine’s generator grew at the same rate, up 5 percent even from 2017 to 2018.
While the prices for wind power were rising up through 2009, there have declined ever since. According to Ars Technica:
The report uses an estimate of future natural gas prices that show an extremely gradual rise of about $10/MW-hr out to 2050. But natural gas—on its own, without considering the cost of a plant to burn it for electricity—is already over $20/MW-hr. That means wind sited in the center of the US is already cheaper than fueling a natural gas plant, and wind sited elsewhere is roughly equal.
What’s all of this mean for technology managers? Simply put, it’s time to consider a strategy of moving to alternative energy sources. While it’s a big change, it can also have big benefits for the business.
The ROI alone should be a good enough reason. It’s clear that the trends show natural gas is rising in cost while wind power is falling. Making the switch now, with tax credits in place for renewable energy, could set the organization up to save thousands over the coming years. There is a ways to go, of course, but switching some operations over will give the organization the infrastructure and experience to continue moving to renewable energy sources down the line.
There’s also the PR impact – organizations that commit to going green often see great receptions from customers and potential customers. In a world where eco-friendliness is akin to benevolence, switching to operations that rely on wind power could provide a huge boost to the company’s reputation. Couple that with the fact that you might be saving money overall and it’s a win-win.
Reports like this are something technology managers should keep an eye on. The renewable energy industry is only growing, and you don’t want to be the organization left behind.