The cost of onshore wind will fall by 12% over the next five years due to lower equipment costs and increased productivity. The world's best wind farms are already economically competitive with coal, gas and nuclear, but the average cost of wind power will not be competitive until 2016.

The BNEF wind group estimates that, thanks to economies of scale and supply-chain efficiencies, every time onshore wind turbine capacity doubles, its cost falls by 7%. Global wind turbine prices have fallen from €2m /MW in 1984 to less than €880,000 /MW in the first half of this year. In 1984, only 0.3GW of wind power was installed worldwide; by the end of 2011, the figure will exceed 240GW.

A steady rise in the output of individual turbines, while the cost of turbines has fallen, is a second factor driving down the price of wind power. These improvements have led to significant improvements in turbine power over the past 27 years, through taller and larger turbines, technological improvements that make better use of aerodynamics, better control and gearboxes, and improved power generation efficiency.

In addition, the cost of operating and maintaining wind farms is falling. As a result of more experienced operators and improved turbine quality, the overall cost of generating electricity from the wind turbines has fallen from 50 euros /MWh in the 1980s to 11 euros /MWh today.

Taken together, the cost (irrespective of any differences or support mechanisms) fell by 14% for every doubling of installed onshore wind capacity between 1984 and 2011, and over that period the cost of onshore wind has fallen from €200 /MWh to €52 /MWh, only €6 /MWh higher than the average cost of gas-fired power generation in 2011. The cost of gas-fired power does not include carbon emissions