Authors: Ahmad Ahmad Sadiq, Esayas Tekleweyni Gebrelibanos, March, 2025
1 Description and History
1.1 Wind Energy Evolution
Wind energy has been utilized for thousands of years. The earliest known instance of wind power dates back to 5,000 BC, when wind was used to propel boats along the Nile River. By 200 BC, wind-powered water pumps were in use in China, and windmills were grinding grain in the Middle East1.
During the 11th century, wind pumps and mills became common in the Middle East, mainly for food production. Wind power later spread to Europe, and by the time of American colonization, windmills were widely used for grinding grain, pumping water, and cutting wood. Homesteaders and ranchers in the United States installed thousands of wind-powered water pumps to support agriculture1.
1.2 First Commercial Wind Turbines
The development of commercial wind turbines dates to the mid-19th century and marks a significant advancement in wind-powered energy generation.
In the 1850s, Daniel Halladay, an inventor, and John Burnham, a businessman, founded the U.S. Wind Engine & Pump Company in Illinois, United States. They designed and patented the Halladay Windmill, which became the first commercially viable windmill2.
The Halladay Windmill was later featured by Austrian engineer Josef Friedländer at the 1883 Vienna International Electrical Exhibition. With a diameter of 22 feet (6.6 meters), Friedländer’s design is recognized as the first wind generator3.
In 1887, James Blyth, a professor in Glasgow, Scotland, built the first windmill used for electricity generation in the United Kingdom4. Around the same time, in 1888, Charles Brush, an American industrialist, developed the first wind turbine in the United States. Situated in Cleveland, Ohio, Brush’s wind turbine had a diameter of 56 feet (17 meters) and was used to supply electricity to his home5.
1.3 Evolution of Wind Power
The evolution of wind power has been shaped by various technological advancements and policy decisions. A significant turning point in wind energy history was the U.S. energy crisis of the 1970s, which led to increased interest in alternative energy sources6. The U.S. government, with support from NASA, launched a research program aimed at developing utility-scale wind energy7. In 1978, the Public Utility Regulatory Policies Act (PURPA) was enacted, mandating utility companies to purchase a fixed portion of electricity from renewable sources7.
By the 1980s, government incentives played a crucial role in advancing wind power adoption, particularly in California, where tax rebates were introduced to promote clean energy8.
1.4 Major Wind Farm Developments
- 1980 – The world’s first wind farm was established in December 1980 in New Hampshire, USA, by U.S. Windpower. This farm consisted of 20 wind turbines, each with a capacity of 30 kilowatts (kW)9.
- 1991 – The first commercial wind farm in the UK, known as Delabole Wind Farm, was constructed with 10 turbines4.
Figure 1 Time evolution of global and European wind power capacity and wind energy generation
2 Economic Performance
2.1 Levelized Cost of Electricity & Installed Cost
The onshore wind energy sector has experienced major growth due to advancements in turbine technology, larger rotor diameters, and improved capacity factors. These factors, along with economies of scale and increased competitiveness, have significantly reduced the LCOE (Levelized Cost of Energy) 10.
Key determinants of LCOE include total installed costs, capacity factor, operation & maintenance (O&M) costs, economic lifespan, and cost of capital. Among these, turbine costs and capacity factors play the most significant roles, as wind energy has no fuel costs 10.
The global weighted-average installed cost fell 6% to $1,500/kW, with turbine prices dropping 10-20%. In 2018, installed costs were $1,170/kW in China, $1,660/kW in the U.S., $1,820/kW in Brazil, and $2,030/kW in the UK, reflecting regional cost variations11.
Between 1984 and 2023, the global weighted average LCOE of onshore wind declined by 91%, from $0.350/kWh to $0.033/kWh. A steep 70% decline occurred between 2010 and 2023, making onshore wind one of the most cost-effective renewable energy sources, now competing with utility-scale solar PV 10.
Regional LCOE Trends (2023)
- United States saw the biggest LCOE reduction (89%) and a capacity factor increase from 19% to 40%.
- Brazil and China had the lowest LCOEs at $0.025/kWh and $0.027/kWh, respectively.
- Most competitive LCOEs (<$0.050/kWh) were seen in China, Spain, UK, Netherlands, US, Canada, Australia, and Brazil.
- Brazil achieved the highest LCOE reduction (79%) from 2010-2023.
Projections estimate that by 2045, LCOE will further decline to between 5.5 and 10.2 €cents/kWh, depending on location and wind conditions12.
Onshore wind now outperforms bioenergy, geothermal, and hydropower in cost-competitiveness and continues to be a leading renewable energy solution10.
2.2 Operations and Maintenance Costs
O&M costs for onshore wind can account for up to 30% of the LCOE (IRENA, 2018). However, advancements in technology, increased competition, and greater experience among operators are driving these costs down. Turbine OEMs are increasingly offering service contracts for higher profit margins, but asset owners are shifting to independent service providers or internalizing O&M services to reduce expenses (BNEF, 2020; Wood Mackenzie, 2019)10.
Between 2010 and 2023, initial full-service contracts dropped by 74%, while renewal contracts declined by 38%. In 2023, O&M costs varied from USD 20/kW per year in Brazil to USD 100/kW per year in Japan, with Germany at around USD 53.1/kW per year. Additional operational costs beyond service contracts, such as insurance and local taxes, contribute to these variations10.
2.3 Economic Viability and Subsidies
The levelized cost of energy (LCoE) for unsubsidized onshore wind in the U.S. has increased by 38% in two years due to inflation and supply chain constraints, rising from $36/MWh in 2021 to $50/MWh in 2023. Despite this, wind energy remains cost-competitive with fossil fuels, driven by technological advancements and lower capital costs. Historically, LCoE for onshore wind has fallen significantly, from $135/MWh in 2009 to $74/MWh in 2013, and continues to decline long-term13.
In Europe, onshore wind’s LCoE ranged from $58/MWh to $76/MWh in 2018, with offshore wind expected to drop to €60/MWh by 2025. When factoring in pollution costs and subsidies, onshore wind is the cheapest energy source in most regions globally14. The same trend applies to China “era of heavy subsidies is fading as wind power is now profitable on its own, making it a viable mainstream energy solution “15.
2.4 Job Creation and Economic Multiplier Effects
In 2024, the global onshore wind energy market was valued at USD 52,654.2 million, with North America holding the largest share at 40% (USD 21,061.68 million), followed by Europe at 30% (USD 15,796.26 million). Asia Pacific accounted for 23% (USD 12,110.47 million), while Latin America and the Middle East & Africa held 5% (USD 2,632.71 million) and 2% (USD 1,053.08 million), respectively. From 2024 to 2031, the market is projected to grow at a CAGR of 3.4% in North America, 3.7% in Europe, 7.2% in Asia Pacific, 4.6% in Latin America, and 4.9% in the Middle East & Africa16.
Together, onshore and offshore wind employ 1.16 million people worldwide, up 1% from 201711. Most wind jobs are found in a small number of countries, although the concentration is less than in the solar PV sector. China accounts for 44% of the global total; the top five countries represent 75%. The regional picture is also more balanced than in the solar PV industry. Asia’s 620 000 wind jobs make up about half the total, while Europe accounts for 28% and North America for 10%. Of the top 10 countries, five are European, three are Asian, and one each is from North and South America. China remained the leader in new installations during 2018, adding 20 GW, of which 1.8 GW offshore (IRENA, 2019b). The country’s total wind employment was estimated to hold steady at 510 000 jobs (CNREC, 2019), followed by Germany (140 800 jobs) and the United States, where wind employment grew 8% to a new peak of 114 000 jobs (AWEA, 2019)17.
2.5 Investment Returns and Financing Model
Onshore wind projects typically need a 6-7 c/kWh power price and a $50/ton CO2 price to achieve a 10% unlevered IRR. Historically, 5-6% IRRs were acceptable, allowing lower incentive prices, but rising inflation and interest rates post-2022 are shifting this trend18.
Financing structures have evolved with industry maturity. Early projects relied on balance sheet financing from utilities, while today’s landscape includes:
- Project Finance: Since 2013, ~90% of new wind projects use this model, signaling technology maturity and bank confidence18.
- Green Bonds: A key debt financing tool, though only $1.2bn of $13.4bn issued in 2019 was for wind18.
- Corporate PPAs Long-term contracts with creditworthy corporate offtakers enable favorable financing terms. Amazon, the largest corporate renewable purchaser, contracted 8.3 GW of wind capacity through 2023, typically with 10-15 year terms providing revenue certainty that reduces financing costs by 150-200 basis points.19.
- Community Ownership: Particularly prevalent in Denmark and Germany, where cooperative ownership models give local residents investment opportunities. The 20 MW Middelgrunden wind cooperative outside Copenhagen has 8,552 members who invested €1,300-€4,000 each, receiving annual returns averaging 7.5% since 200120.
3 Ecological Performance
3.1 Overview
With global electricity demand projected to increase by 80% by 2040, the shift towards renewable energy sources is essential to meet sustainability goals. Among renewables, onshore wind energy has become one of the fastest-growing clean energy sources due to its low greenhouse gas (GHG) emissions and minimal environmental footprint. However, like all energy technologies, wind power has ecological impacts throughout its life cycle, from manufacturing to decommissioning.
This study evaluates the life cycle ecological performance of onshore wind energy through Life Cycle Assessment (LCA)21.
3.2 Life Cycle Assessment and GHG (Green House Gas) of Wind Farms
Total GHG emissions are given by the following general equation:
GHG signifies the greenhouse gas equivalent (Kg CO2), M signifies for manufacturing, TI for transportation and installation, OM for operation and maintenance, and ED for end-of-life and disposal.
Each term in Eq. (1) represents a summary of comparable CO2 emissions for each phase.
Figure 2 Life cycle boundary and process of wind turbine
3.2.1 GHG Related to Manufacturing
In the analysis of the manufacturing phase, it is assumed that the components of the tower, nacelle, and rotor originate from various locations. The characteristics of these materials vary depending on the manufacturer, which directly influences the associated CO2 emissions. Most of these emissions result from the extraction, processing, and transportation of raw materials used in component production, including steel, copper, and epoxy. The material quantities are determined based on supplier manuals and technical reports from wind turbine manufacturers21.
The equivalent CO2 emissions for manufacturing Phase is estimated as follows:
: The receiving mass of each element
: Emission factor intensity of material
3.2.2 Ecological Impact of Transport and Installation
The ecological impact of the transport and installation phase is influenced by the accessibility of the wind farm site and the distances over which turbine components and construction materials must be transported. The emissions generated during this phase depend on the mode of transport used (e.g., road, rail, sea, or air) and the distance between manufacturing sites, material supply points, and the wind farm location. Transportation logistics play a crucial role in determining the overall CO2 footprint, as longer distances and reliance on fossil-fuel-based transport methods contribute to higher emissions. Data on CO2 emissions related to transportation methods is typically used to quantify these impacts21.
The equivalent CO2 emissions for transport and installation Phase is calculated as follows:
where: D: distance for type i
P: Weight materiel for type i
I: intensity of diesel
S specific gravity of diesel
f: emission factor of diesel
3.2.3 Ecological Effect of Maintenance and Operation
The maintenance and operation phase of wind farms involves periodic activities required to ensure the reliable functioning of turbines. These operations are influenced by mechanical, electrical, and environmental factors, including climatic conditions such as dust, temperature fluctuations, and frost. Three key aspects contribute to the ecological footprint of this phase:
- Periodic Maintenance Activities: Regular maintenance includes replacement of faulty mechanical parts, lubrication, and hydraulic system adjustments. The consumption of lubricating oils and fluids generates emissions based on their mass, density and CO2 emission factors.
- Component Replacements: Over time, wear and tear on turbine components necessitates part replacements, contributing to environmental impact. Studies estimate that such replacements can account for approximately 5% of the total turbine mass in terms of emissions.
- Transportation of Maintenance Personnel: The travel required for maintenance teams to access the wind farm significantly influences emissions. The distance travelled and frequency of visits play a crucial role in determining the CO2 footprint associated with workforce transportation21.
By optimizing predictive maintenance techniques, reducing unnecessary transport, and using sustainable lubricants, the ecological impact of the operation and maintenance phase can be minimized.
Equation (4) combines three terms of this operation to evaluate the equivalent in CO2 emissions.
GHGreplace: represent the emission of replacement
GHGoil&lubr: represent emissions of colossal quantities of oil and lubricants
GHGprsnltrpt: represent the co-operations emissions.
4 Social Impact
4.1 Public Acceptance and Opposition
Public perception of onshore wind energy varies widely and is shaped by socioeconomic factors, governance structures, and community engagement22. Initially, opposition was primarily attributed to the Not-In-My-Backyard (NIMBY)phenomenon, where people support wind power but resist projects near their homes23. However, more recent studies reject NIMBYism as an oversimplification, emphasizing that landscape concerns, fairness, and trust in developersplay a far more significant role in shaping public attitudes24,25.
Research from Canada, the United States, and Europe indicates that local opposition is often rooted in a lack of public involvement in decision-making, concerns over the distribution of economic benefits, and the visual and noise impact of turbines26,27. Community-led wind projects, where local residents share ownership or receive financial benefits, tend to face lower resistance than large-scale projects developed by private corporations28.
4.2 Visual and Landscape Impact
One of the most frequently cited objections to wind energy is its impact on landscapes and scenic beauty, especially in rural and culturally significant areas29. Wind farms are often perceived as intrusive structures that disrupt natural and historical landscapes, which can negatively affect tourism and property values30.
Empirical studies using choice experiments and geospatial modelling reveal that people are willing to pay higher electricity prices to avoid wind turbines in highly scenic locations31. Furthermore, cumulative visual impacts, where multiple wind farms are constructed in the same region, can exacerbate public resistance and lead to greater planning restrictions32.
4.3 Noise and Health Concerns
Noise generated by wind turbines, particularly low-frequency noise and infrasound, has been a significant source of concern for nearby communities33. While some residents report sleep disturbances, stress, and general discomfort, scientific studies remain inconclusive about whether wind turbine noise causes direct physiological health effects34.
A large-scale meta-analysis found that annoyance due to wind turbine noise is strongly linked to pre-existing attitudes toward wind energy, rather than to actual noise exposure levels35. This suggests that the perception of harm may be psychosocial rather than physiological, reinforcing the importance of community engagement and transparent project planning.
5 Political and Legal Aspects
While global and national policies promote wind energy as environmentally friendly, legal protections for local objectors and municipal planning autonomy hinder implementation. These challenges reflect broader global trends where wind power expansion is affected by regulatory uncertainties, land-use conflicts, and the need for stronger national policy alignment. Offshore wind development is suggested as a solution to reduce legal and social resistance, alongside enhanced citizen participation and long-term policy stability36.
5.1 Policy Stability and Government Commitment
Policy consistency is critical for the success of onshore wind energy. Countries with long-term commitments and clear regulatory frameworks (e.g., Germany, Denmark, and China) have seen stable market growth. In contrast, policy uncertainty in countries like the United States and Italy has led to fluctuating investments. The presence of dedicated renewable energy ministries or agencies (e.g., BMU in Germany, MNRE in India) has played a key role in streamlining regulations and improving coordination between different government departments15.
5.2 Legal Frameworks and Permitting Processes
Permitting and siting laws vary significantly across countries, influencing the speed and scale of wind energy development. Denmark and Germany have streamlined procedures, reducing administrative barriers and allowing for faster project approval. Conversely, Italy, the UK, and Greece have experienced delays due to complex permitting requirements and regional policy inconsistencies. Countries with dedicated siting guidelines and clear land-use policies tend to have higher deployment rates and fewer legal disputes over wind farm locations15.
5.3 Grid Integration and Access Policies
Ensuring priority access to the electricity grid is a major factor in wind energy expansion. Germany, Denmark, and China have established grid codes that prioritize wind power, ensuring projects can feed electricity into the system without restrictions. However, grid congestion and curtailment issues have been problematic, especially in China and Germany, where overproduction has led to forced turbine shutdowns. Proper grid planning and expansion are necessary to accommodate growing wind capacity15.
5.4 Federal vs. State-Level Policy Conflicts
Countries with federal-state regulatory overlaps experience challenges in policy alignment. In India and the United States, state governments play a crucial role in setting renewable purchase obligations and incentives. However, inconsistencies between federal and state-level policies can create investment uncertainty. The US production tax credit (PTC) has been a major driver of wind energy growth, but short-term renewals have caused boom-and-bust cycles in the industry15.
5.5 Economic and Political Barriers
Economic crises and political instability have had a direct impact on wind energy deployment. Greece, Spain, and Portugal faced investment slowdowns following the 2008 financial crisis, despite having strong renewable energy targets. In contrast, Brazil’s wind sector remained resilient, supported by government-backed financing (BNDES) and auction-based procurement models. Countries that integrate renewable energy policies with broader economic strategies tend to have more sustainable wind energy development15.
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