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Will wind energy reduce demand and raise coal power prices?



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Will wind energy reduce demand and raise coal power prices?
Energy consumption is increasing to the extent that conventional sources of fuel have 
no reason to worry about losing their market share. However, if demand for conven
-
tional fuels were reduced by wind power, any reduced fuel prices would compensate 
for the (currently) higher costs of renewable sources. In other words, rates would 
decrease overall. While energy consumption is increasing, demand for green energy is 
also rapidly increasing. Wind power still has to compete with existing fossilized plants, 
but many are willing to pay 
extra
for green energy.
7
Is wind energy expensive?
Wind is commercially competitive now, despite perverse subsidies, and is the fastest 
growing energy source. The unit cost of wind energy is being reduced rapidly with 
economies of scale – over 80 per cent in 25 years. Energy from natural gas is currently 
cheaper, but gas prices are rising and may continue to do so. Future energy supplies 
from wind power will be stable, and wind does not increase in price. Wind generators 
do not have fuel costs or supply risks, are low in operation and maintenances costs, and 
will benefit from future carbon pricing mechanisms and environmental regulations.
Is wind energy inefficient?
Wind power plants convert up to 50 per cent of the energy from wind into electric-
ity, while coal power plants convert about 25 per cent of the energy from coal into 
electricity, and two thirds of this energy is lost in transmission. Operation energy ef
-
ficiency is not critical in the case of wind, as wind is free and does not produce waste.
Coal, on the other hand, contains many highly toxic elements that are released into 
the air and water. Moreover, the average wind farm pays back its embodied energy in 
about half the time taken by coal or nuclear power plants.
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