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Optimal over installation of wind generation facilities

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  • McInerney, Celine
  • Bunn, Derek W.

Abstract

This paper evaluates the economic benefits to over-installing turbines on capacity-constrained wind farm sites in order to capture more energy at low wind speeds. Although this implies curtailment at high wind speeds, we show that over installing generation facilities can increase returns to investors and reduce system costs. A detailed model-based analysis is developed using British data, with variations in the range of over installation, the renewable policy support systems (fixed feed-in tariffs or green certificate premia to wholesale energy prices) and the extent of replacement of fossil generation in the technology mix with wind. In the cases of premia to market prices, we use agent-based, computational learning and risk simulation to model market prices. Not only is over installation beneficial under fixed feed-in tariffs, but is more so under premia to market prices and increasingly so as wind replaces fossil generation.

Suggested Citation

  • McInerney, Celine & Bunn, Derek W., 2017. "Optimal over installation of wind generation facilities," Energy Economics, Elsevier, vol. 61(C), pages 87-96.
    • Handle: RePEc:eee:eneeco:v:61:y:2017:i:c:p:87-96
    DOI: 10.1016/j.eneco.2016.10.022
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    Cited by:

    1. Christoph Wolter & Henrik Klinge Jacobsen & Lorenzo Zeni & Georgios Rogdakis & Nicolaos A. Cutululis, 2020. "Overplanting in offshore wind power plants in different regulatory regimes," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 9(3), May.
    2. Henao, Felipe & Dyner, Isaac, 2020. "Renewables in the optimal expansion of colombian power considering the Hidroituango crisis," Renewable Energy, Elsevier, vol. 158(C), pages 612-627.
    3. Henao, Felipe & Rodriguez, Yeny & Viteri, Juan Pablo & Dyner, Isaac, 2019. "Optimising the insertion of renewables in the Colombian power sector," Renewable Energy, Elsevier, vol. 132(C), pages 81-92.
    4. Stetter, Chris & Piel, Jan-Hendrik & Hamann, Julian F.H. & Breitner, Michael H., 2020. "Competitive and risk-adequate auction bids for onshore wind projects in Germany," Energy Economics, Elsevier, vol. 90(C).
    5. Cuadra, L. & Ocampo-Estrella, I. & Alexandre, E. & Salcedo-Sanz, S., 2019. "A study on the impact of easements in the deployment of wind farms near airport facilities," Renewable Energy, Elsevier, vol. 135(C), pages 566-588.
    6. Ildar Daminov & Anne Blavette & Salvy Bourguet & H. Ben Ahmed & Thomas Soulard & Pierre Warlop, 2023. "Economic performance of an overplanted offshore wind farm under several commitment strategies and dynamic thermal ratings of submarine export cable," Post-Print hal-04183205, HAL.

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    More about this item

    Keywords

    Capacity investment; Wind power generation; Electricity markets; Power system economics; Risk; Agent-based simulation; Investment appraisal;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • P18 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Energy; Environment
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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