World Energy Outlook 2006

Wind power generation is generally more expensive than coal and – to a lesser
extent – than gas, but it can be competitive in certain locations. Incentives are
widely available for development of wind farms and these are expected
to continue to be available. Nuclear power is projected to be cheaper than
gas-fired generation but more expensive than coal. The introduction of a
carbon value would increase the costs of coal-fired generation and, to a lesser
extent, of CCGT generation, making nuclear and wind power more attractive
economically (Figure 6.9).
US cents per kWh
10
9
8
7
6
5
Figure 6.9: Impact of Carbon Value on Generating Costs
4
0 10 20 30 40 50
dollars per tonne of CO 2
Nuclear low Wind low Coal steam CCGT
Nuclear high Wind high IGCC
Note: Nuclear capital costs range between $2 000 and $2 500 per kW, reflecting uncertainties about the costs
of new nuclear power plants (see also Chapter 13). Differences in wind power costs reflect different capacity
factors.
Capacity Requirements and Investment Outlook
Over the Outlook period, a total of 5 087 GW of generating capacity is
projected to be built worldwide in the Reference Scenario. More than half of
this capacity is in developing countries (Table 6.1). OECD countries need over
2 000 GW. Power plants in OECD countries are ageing. Retirements of old
coal-fired and nuclear plants become significant around the middle of the next
decade. Most of these retirements are in OECD Europe, where environmental
restrictions will force old and inefficient coal-fired units to close and present
Chapter 6 - Power Sector Outlook 147
© OECD/IEA, 2007
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