Is wind power holding electricity costs down?

I found the conclusion of the article by Brennan Louw on renewable energy and electricity costs intriguing, and decided to look a bit deeper into the data myself. Looking at the Department of Energy data for all 50 states, there is very strong evidence to suggest that wind energy is helping to hold electricity costs down. Here is what the data show:

For the 30 states with the least installed wind farm capacity and the District of Columbia, a group for which wind turbines only accounted for 0.3% of electricity produced in 2010, electric rates increased by an average of 26.74% between 2005 and 2010. For the 20 states that produced the largest share of their electricity from wind turbines (ranging from 2% to 15.4%) in 2010, consumer electricity prices increased an average of only 15.72%.

When one looks at the top wind farm states, the difference is even more striking. For the 40 states with least wind farm installed and DC, prices rose by an average of 34.10%. For the top 10 states in wind farm generation (with wind providing between 5.1% and 15.4% of electricity), electricity prices increased an average of only 10.94%, or one-third as much as in the 40 low wind use states.

Methodology: Top 20 wind farm rankings for 2010 taken from Table 2 here: . DOE EIA (Energy Information Administration) electricity price data from Electric Power Annual: The calculation of the average electric price changes for each group (top wind farm states versus other states) was weighted by the total megawatt-hours (MWh) of electricity consumed in each state in 2010, since not doing that would give smaller states a disproportionate impact on the average change for each group. However, not weighting for electric demand still results in a meaningful difference: a 20.00% price increase for the top 20 wind farm states and a 27.68% increase for the other 30 states and DC, or an 18% increase for the top 10 wind states and a 26.3% jump for the 40 other states plus DC.

Caveat: There are many factors that influence the price of electricity, so this isn’t necessarily proof that more wind will automatically lead to lower prices, although others have found a causal connection for how wind drives electricity prices down: What is clear is that the data stands in strong opposition to those who have tried to make unsupported claims that wind energy will drive up electricity prices.

By Michael Goggin, American Wind Energy Association Manager-Transmission Policy,