With only 850 MW of capacity auctioned in 2016, the 1000 MW Moroccan Wind Energy Initiative of ONEE provided the world’s lowest wind energy costs. At 2.7 €cent/kWh without support mechanisms and up to 70% of the total investments spent in local contents, the industry is on track to reach even lower wind energy prices in the future.
Compared to Germany's 1900 hours of wind power production per year, the exceptional quality of the Trade Winds blowing over the Sahara desert would generate production figures exceeding 3400 Full Load Hours. In 2002 we published the following cost simulation: taking a price of 1000 €/kW of rated Wind Turbine capacity, 5% real interest rate, 20 years lifetime and 2% of total investment as annual Operation & Maintenance costs, wind power costs fall under 3.0 €cent/kWh. From single wind measurements available within this territory, where 4500 Full Load Hours can be derived, wind energy prices would drop even further.
To transfer the power from the region of Tarfaya, the northern part of this area, to the center of Germany for example, the length of a HVDC line would be 3500km (incl. 28km sea cable). For this case, the total costs of wind generated electricity from the Sahara desert delivered all the way to Germany are calculated to be 4.4 €cent /kWh. Thereof 0.4 €cent/kWh are due to the losses of 10% using a HVDC line of about 5 GW capacity [Czisch].
Through the most productive sites where wind speeds have been measured, lower costs can be achieved.
By their large-scale application inside the EU, wind turbine costs dropped significantly. The price of the installed capacity may even be lower than what been assumed in the aforementioned example. With less than 1 GW of capacity installed, Spain managed in the year 2000 to drop wind power costs down to 850 €/kW. A global frenzy in wind turbine demand fueled by a limited manufacturing supply base increased prices dramatically. As demand plummeted after the global economic crisis of 2008, so did raw material costs required in wind turbine manufacturing. With subsidy reductions in European markets, wind turbine production globalized by shifting to Asia.
Today’s elaborate supply base turned the wind industry into a competitive business. By installing close to 20 GW per year since 2010 (50% of the world's wind turbine market), China managed to significantly reduce wind capacity costs. In the United States, backed by incentive schemes wind energy hit an all-time low in 2013, averaging 2.5$cents/kWh. Built with local components, access to cheap electricity can have a considerable impact on a country’s industrial competitiveness.
In the Sahara desert, costly design features may not be required as in Europe’s more densely populated areas. On such scale, the transfer of wind turbine components manufacturing can be achieved. Besides reducing operation and maintenance costs, this provides a stable production base for wind turbines designed to match specific local wind conditions. This represents a critical parameter for the Sahara Wind project's competitiveness and successful implementation within the region's current power supply schemes.