The Impact of Wind Power Support Schemes on Technology Choices

Aufsätze referiert extern - Web of Science 2017

Nils May

In: Energy Economics 65 (2017), S. 343-354

Abstract

In energy systems with large shares of variable renewable energies, electricity generation is lower during unfavorable weather conditions. System-friendly wind turbines (SFTs) rectify this by producing a larger share of their electricity at low wind speeds. This paper analyzes to what extent SFTs' benefits out-weigh their additional costs and how to incentivize investments into them. Using a wind power investment model for Germany, I show that SFTs indeed deliver benefits for the energy system that over-compensate for their cost premium. Floating market premium schemes incentivize their deployment only where investors bear significant price risks and possess sufficient foresight. Alternatively, a new production value-based benchmark triggers investors to install SFTs that meet the requirements of power systems with increasing shares of variable renewable energies.

Nils May

Wissenschaftlicher Mitarbeiter in der Abteilung Klimapolitik



JEL-Classification: Q42;Q55;O38
Keywords: Renewable energy, Wind power technology, Feed-in tariff, Project finance, Market premium, Policy evaluation, Market value
DOI:
https://doi.org/10.1016/j.eneco.2017.05.017
http://www.sciencedirect.com/science/MiamiMultiMediaURL/1-s2.0-S0140988317301810/1-s2.0-S0140988317301810-mmc1.pdf/271683/html/S0140988317301810/0c2dfcb5949cdcecc50936e0d4c2e635/mmc1.pdf