Distributed Wind Turbine Hits Grid Parity

December 10, 2015 by Jeff Shepard

Northern Power Systems Corp. today announced that substantial technology-driven operational improvements to its flagship Northern Power 100kW wind turbine platform have been demonstrated to materially decrease the delivered Levelized Cost of Energy (LCOE) of wind power produced by its turbines.

“The current LCOE makes the Northern Power platform even more affordable for farmers, local businesses and on-site generation users trying to limit the ever increasing cost of electricity” said Reinout Oussoren, VP of Global Sales. “Small wind is now an even more viable alternative for commercial and industrial users.”

As highlighted in recent news from Bloomberg New Energy Finance, LCOE for renewables, including distributed wind and solar, continues to decrease while the same measure for fossil fuel increases. The LCOE—which includes the capital, operating, and any financing costs of an NPS 100 kW wind tur-bine over a 20-year+ operating life—has reached parity or better with electricity purchased from the grid.

“When installed at locations with an average 6.5 meter per second wind speed” Oussoren added, “a typical wind turbine installation will deliver energy costs of approximately 8 cents per kilowatt hour, with a Return on Equity (ROE) of up to 14 percent and payback in just over 5 years. If a customer leverages its purchase with 70% debt at a commercial rate of 7%, the ROE can exceed 30%.”

Distributed generation is most effective for local businesses and farmers that wish to benefit from natural resources in their location in order to offset high electricity prices and lock in the cost of electricity. Wind turbines perform best where there is more wind, but even in areas with lower wind speeds, by combining wind and solar, one is able to complement the variations in natural resources and deliver an effective and stable local generation alternative.