The latest edition of the Wind Turbine Price Index (WTPI) from Bloomberg New Energy Finance, shows that contracts signed in the second half of 2011 for 2013 delivery fell to EUR 0.91m/MW ($1.21/MW), down 4% from six months earlier and well off their five-year high of EUR 1.21m/MW in 2009.

Prices dropped most sharply for older turbines to EUR 0.85m ($1.38m) per megawatt on average, down 10% from six months earlier. Newer wind turbine models are more efficient and offer improved capacity factors. However, analysis of contracts covered by the Wind Turbine Price Index (WTPI) found that even the new models have seen prices coming down.

The sixth issue of the WTPI shows prices falling in the second half of 2011 in all parts of the world as Chinese manufacturers competed strongly for orders, even in developing markets such as Brazil, Chile, Ecuador, Pakistan, Ethiopia and Australia. The survey revealed procurement officers and turbine manufactures sharing a generally negative outlook on prices; most anticipate further moderate declines in turbine prices in 2012 and 2013. They don’t expect prices to recover until at least 2014.

One significant silver lining in the latest results of the WTPI is that lower equipment prices make wind more competitive with fossil-fuelled forms of generation. Michael Liebreich, chief executive of Bloomberg New Energy Finance, commented: “Short-term pain among wind manufacturers is now undeniable and unavoidable. But the current price slump is good news on the demand side as wind is more competitive with coal and gas on a dollar-per-megawatt hour basis, which is vital given ever-lower levels of subsidy and support. Those manufacturers which can achieve leading cost positions are going to be in a good strategic position when the market enters its next expansionary phase in a few years.”

Bloomberg New Energy Finance’s analysis has previously shown that power generated by the world’s best new wind farms can achieve costs of 6.5 US cents per kWh, compared with the same per kWh for coal-fired power stations. By 2016 the firm expects the median new wind farm worldwide to be competitive with coal-based power with no subsidies.

The WTPI represents aggregated data collected on a confidential basis from 38 of the world’s largest buyers of wind turbines. The sample includes information on more than 230 turbine contracts totaling nearly 10.6GW of contracted capacity – with a main focus on Europe and the Americas.