Plant Cost and Performance Projections Methodology

ATB projections were derived from two different sources for the Mid and Low cases.

• Mid: A survey of 163 of the world's wind energy experts was conducted to gain insight into possible future cost reductions, the source of those reductions, and the conditions needed to enable continued innovation and lower costs (Wiser et al. (2016)). This expert survey produced three cost reduction scenarios associated with probability levels of 10%, 50%, and 90% of achieving LCOE reductions by 2030 and 2050. In addition, the scenario results include estimated changes to CAPEX, O&M, capacity factor, project life, and weighted average cost of capital (WACC) by 2030.
• For the Mid case, the LCOE percentage reduction from the Base Year was equivalent to that corresponding to the Median Scenario (50% probability) in the expert survey (Wiser et al. (2016)).
• Expert survey estimates were normalized to the ATB Base Year starting point in order to focus on projected cost reduction instead of absolute reported costs. The percentage reductions in LCOE by 2020, 2030, and 2050 from the expert survey's Median scenario were implemented as the ATB Mid case. This is accomplished by using survey estimates for changes to capacity factor and O&M costs by 2030 and 2050. The corresponding CAPEX value to achieve the overall LCOE reduction is computed. The percentage reduction in LCOE by 2030 and by 2050 was applied equally across all TRGs. The overall reduction in LCOE by 2050 for the Mid cost scenario is approximately 31%.
• Low Technology Cost Scenario: A study conducted by NREL (Dykes et al. (2017)) assessed a variety of intelligent and novel technologies that comprise of next-generation wind plant technologies in order to estimate the LCOE of a SMART wind plant in 2030. The study used a bottom-up approach informed by research programs such as the DOE's Atmosphere to Electrons (A2e) program and input from wind energy experts to determine a future wind plant's potential LCOE impacts from enhanced power production, more efficient materials and manufacturing capabilities, lower O&M and servicing costs, lower project risks for investors, increased wind plant life, and an array of grid control and reliability features. Considering the technology advantages of the SMART wind plant, the potential for LCOE reduction is nearly doubled by 2030 compared to the Mid cost scenario derived from the expert survey, and it results in just over a 60% reduction in LCOE by 2050.

A broad sample of cost of wind energy projections is shown to provide context for the ATB Constant, Mid, and Low technology cost projections. The ATB Mid cost projection, which corresponds to the Median scenario from the expert survey, results in LCOE reductions that are slightly lower than other median scenarios in the literature (ARUP (2011); BNEF (2015); E3 (2014); EIA (2014); EPA (2015); GWEC (2014); IEA (2015c); IRENA (2016a); Teske et al. (2015)). The ATB Low cost projection, which corresponds to the NREL bottom-up cost analysis, is similar to the lower bound of the sample of literature projections (BNEF (2016); IEA (2015c); MAKE (2015)).

• Mid case projection institutions: Ove Arup & Partners Ltd., Bloomberg New Energy Finance, Energy and Environmental Economics, U.S. Energy Information Administration, United States Environmental Protection Agency, Global Wind Energy Council, International Energy Agency, International Renewable Energy Agency, and Greenpeace.
• Low case projection institutions: Bloomberg New Energy Finance, International Energy Agency, and MAKE Consulting.