Way Off: The Effect of Minimum Distance Regulation on the Deployment and Cost of Wind Power

With the expansion of onshore wind power, countries increasingly consider the introduction of minimum distance regulations between wind turbines to nearby residential areas, to increase public acceptance. In 2014, the German federal state of Bavaria introduced a minimum distance regulation that requires new wind turbines to be ten times their total height away from settlements (10-H regulation). This translates into a distance of 1,900 metres on average, which far exceeds national provisions on minimum distances. Using a difference-in-differences approach, we find that the introduction of the 10-H regulation led to a decline of the newly added wind power capacity in Bavaria of between 62 percent and 90 percent. Moreover, the legislation affected technological parameters of new wind turbines, with severe unintended consequences for the deployment and cost of wind power. The regulation triggered a reduction of the height of new turbines, which lowered energy yields and increased levelized costs of electricity (LCOE) by about 0.2 ct/kWh. Furthermore, lower energy yields also require a higher absolute number of turbines in the long term to achieve the expansion targets for onshore wind energy, counteracting the goal of increasing acceptance of wind power.