Further, the latest Wind Power Monthly has its annual review of energy costs, which deserves an entire diary, concluding that wind remains competitive with all thermal generation. They further state that the thermal industries completely underestimate the risk premium associated with building thermal plant. "Life shrinks or expands in proportion to one's courage." - Anaïs Nin
Just how wind power has managed to stay competitive against falling fossil fuel prices requires a deal of explanation. Suffice to say here that it has much to do with the sharp fall in interest rates on borrowed money, which brings down the cost of capital-intensive wind power far more than it does the fossil fuel technologies. Another reason for wind power holding its own lies in the rapidly rising cost of hedging the risk of fossil fuel prices going through the ceiling once more. Nobody expects oil prices to stay at less than $50 for long and even the International Energy Agency, a child of the oil industry, believes they are heading for $200 a barrel in the medium to long term. Any hike in oil prices has historically dragged gas and coal prices up too, for the simple reason that demand for them rises as oil prices itself out of the market. We take a closer look at the "cost of fuel price risk" in a side story to this year's main article.
Another reason for wind power holding its own lies in the rapidly rising cost of hedging the risk of fossil fuel prices going through the ceiling once more. Nobody expects oil prices to stay at less than $50 for long and even the International Energy Agency, a child of the oil industry, believes they are heading for $200 a barrel in the medium to long term. Any hike in oil prices has historically dragged gas and coal prices up too, for the simple reason that demand for them rises as oil prices itself out of the market. We take a closer look at the "cost of fuel price risk" in a side story to this year's main article.
