ABSTRACT
Wind energy is the most rapidly expanding source of energy in the world today. Over the past 10 years,
the worldwide installed capacity of wind energy has grown at an average rate of over 28% per year,
leading to an installed nameplate capacity at the end of 2004 of about 48,000 MW, enough to power
about 16 million average American homes. As of January 2005, Germany was the world leader in wind-
energy installations with about 16,600 MW installed, followed by Spain with 8300, the US with 6700,
Denmark with 3100, India with 3000, Italy with 1100, The Netherlands with 1100, the United Kingdom
with 900, Japan with 900, and China with 800. Although wind power supplies only about 0.6% of the
world electricity demand today, the size of that contribution is growing rapidly. In Germany, the
contribution of wind power to electricity consumption is over 5%, in Spain it is about 8%, and in
Denmark it is approximately 20%. The cost to generate wind energy has decreased dramatically from
more than 30 cents (U.S.) per kilowatt-hour (¢/kWh) in the early 1980s to under 4¢/kWh (at the best
sites) in 2004. The cost has actually increased somewhat in the recent past, in spite of continuing
technological improvements, as a result of worldwide increases in steel, concrete, and transportation
costs that have led to increases in the prices of wind turbines. The large increases in the cost of natural gas
and other fossil fuels have made wind-generated electricity a lower-cost option than natural gas for many
utilities adding generating capacity. In fact, the demand for wind energy in the United States has been so
strong that wind-power developers are demanding and receiving significantly higher prices in their new
long-term power purchase agreements with utility companies than they did 2 years ago.
