The relentless reduction of the Cost Of Energy (COE) has made wind energy one of the cheapest sources of electricity. However, as the penetration of renewables in open-market grids increases, it starts to affect the electricity price so that it can be practically zero on windy days. Therefore, to become profitable, modern wind energy systems need to maximise the “value” (production×price) of electricity instead of the “volume” (production).

Loth et al. (2022) illustrate this paradigm change by comparing the Cost of Valued Energy (COVE) with the COE for the German grid with high levels of wind energy and the California grid with high levels of solar energy. Using three different energy price models, they show that the COVE is considerably higher than the COE. They project that open-market grids with high penetration of renewables will have COVE/COE values greater than 2.

To increase the revenue of future wind turbines, we should minimise the COVE by producing energy when electricity prices are high. This is possible by designing for higher capacity factors or integrating energy storage, giving them a different production profile than traditional turbines.

Loth, Eric, Chris Qin, Juliet G. Simpson, and Katherine Dykes. 2022. “Why We Must Move Beyond LCOE for Renewable Energy Design.” Advances in Applied Energy 8 (December): 100112. https://doi.org/10.1016/j.adapen.2022.100112.