Wind energy is a free fuel source of energy. This means it costs nothing (except to convert it to electrical power) and is not subject to the same unpredictable, risk laden volatility as are fossil fuels. We can predict the price of wind now, in 10 years and in a 100 years – it will always be a free fuel source. Not so with oil, gas, coal and uranium, whose prices fluctuate.
Another major element to be considered in the future of electricity prices is the pollution charges that apply. Pollution that arises from nitrogen and sulphur has been largely handled by a combination of plant innovation fines and fuel switching. Carbon however is an inherent end state product when dioxide fossil fuels are used to make electricity. The only way to deal with it is to stop burning fossil fuels.
Fines on the production of CO2 are now being applied under the Kyoto Treaty and EU regulations. In 2008 a tonne of CO2 is trading at €25. This translates into a fine of approximately 1€/KWhr for gas fired generation and approximately €2 for coal fired generation. As climate change concerns accelerate, the fines to be paid will increase.
Most authorities now accept that the peak of oil production is already passed and that gas, although more plentiful, will peak within 10 years.
The following tables show the trends in global fossil fuel prices.
Source: International Energy Agency, Key World Energy Statistics 2010, Page 40
Source: WTRG Economics
Source: International Energy Agency, Key World Energy Statistics 2010, Page 41
Source: International Energy Agency, Key World Energy Statistics 2010, Page 41
