Abstract: The energy supply and environmental constraints need to be solved for Chinas economic sustainable growth. Therefore, it is an important energy strategy to promote the development of renewable energy. Duing to the abundant wind resources and relatively mature wind power generation technology, wind power develops rapidly in recent years, and becomes the third major power after the thermal power and hydropower. In order to analyze the competitiveness of wind power, the cost of wind power and coal power generation is compared by considering such environmental externalities as greenhouse gas and pollution gas in this paper. Based on the life cycle method, the overall cost of wind power is higher than coal power by only 0.02 yuan per kilowatt hour by considering environmental costs.