A Methodology for Updating Wind Turbine Capital Costs

Abstract

Wind turbine cost models can become obsolete due a number of factors such as changes in manufacturing techniques and the price of raw materials. This paper illustrates that, in order to keep the models current, the Producer Price Index (PPI) should be included to escalate and deescalate the costs of producing wind turbine components. The PPI is incorporated into a popular cost and scaling model developed at the National Renewable Energy Laboratory (NREL) by using the weighted averages of the PPI for each of the components of the turbine. A single PPI for the entire turbine is calculated which can be used to escalate the costs of the NREL model. The “wind turbine PPI” is then calculated for each year starting in 2002 and ending in 2010. The resulting updated turbine costs are inflated to 2010 US dollars and compared to wind turbine prices in the United States, as reported by the Lawrence Berkeley National Laboratory (LBNL). It is shown that the PPI is able to simultaneously predict the net effects of labor costs, materials prices and energy prices. The results can be used to escalate the costs stated in the NREL model or to update the costs of similar turbines across time.