I recently came across a great article written in the Washington Post which really gives some insight about the economics behind wind power and coal power.

If you happen to listen to the more politicized or economic discussions, you’ll probably notice that the ball is thrown into the field of natural gas: many believe that low fortune of coal companies is caused by the low costs of natural gas, which convinced many industries to opt for them, but that’s not entirely true: the cost of mining coal has been going up. Why is this happening? I mean, the US are often regarded as the Saudi Arabia of coal, with resources enough to last another 200 years. The answer lies in the increased costs of transportation, explosives and wages, but most of all, it lies in geology. Whenever a resource is tapped, the easiest access, richest areas are always explored first. Now, despite the massive resources the US and many countries still have, it will be quite hard to extract them, which means more costs, and less profit; the “easy” coal has run out.

But then again, on the other side of the coin lies wind power; according to the American Wind Energy Association, the costs of wind energy were 10 times higher in 1980 than they are now. More efficient, better technologies are alwasy appearing to lower the costs, and there is no “easy” wind or “hard” wind. Being a renewable energy, you can access a great area indefinitely. At the moment, a lot depends on local subsidies, taxing, etc, but we are definitely nearing a point where the costs of wind and coal will be pretty much equivalent – and that will definitely be a game changer.

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