Wind Energy FAQs: Wind Use and Electricity Price

Wind Use vs. Power Price: Correlation by State

In this post we demonstrate that states which generate more of their electricity using wind energy, tend to pay less for their electricity than the national average.

The U.S. Energy Information Administration publishes both average electricity prices and wind usage, by state. Using that information we ran a correlation analysis the results of which are shown;

The chart is quite ‘busy’ so a brief explanation may help.

The vertical blue bars, which refer to the left-hand axis, show the amount which each state (plotted along the horizontal axis) generates from wind energy. The wind leader is North Dakota (ND) at 51%.

The amount which each state pays for electricity – a weighted average of residential, commercial and industrial prices – is shown by the red triangle which should be read against the right-hand axis. For instance, North Carolina (NC), on the far right, pays an average price of $92 per megawatt hour (MWh) of electricity or 9.2 cents per kilowatt hour.

Also shown, with the dotted horizontal line, is the U.S. average electricity price of $105.8/MWh.

A quick glance indicates that high wind states tend to pay less for their electricity – of the 18 states with the best wind resource, only 3 (Kansas, Maine and Minnesota) pay more than the national average for their power.

For the data nerds, a slightly more objective analysis of the material – a scatter plot with a regression line – is shown below;

The R squared value of the regression does not show a great fit between the two variables, it does nonetheless indicate a weak inverse correlation between the amount of wind energy and power prices. In other words; there is no evidence to support the statement that U.S. states with more wind energy have higher electricity prices. In fact, there is weak evidence that more wind energy means lower power prices.