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Profitability and Revenue Uncertainty of Wind Farms in Western Europe in Present and Future Climate

Author

Listed:
  • Bastien Alonzo

    (DIRSE - Météo-France Direction Interrégionale Sud-Est - Météo-France)

  • Silvia Concettini

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, IRJI - Institut de recherche juridique interdisciplinaire - UT - Université de Tours)

  • Anna Creti
  • Philippe Drobinski

    (LMD - Laboratoire de Météorologie Dynamique (UMR 8539) - INSU - CNRS - Institut national des sciences de l'Univers - X - École polytechnique - ENPC - École des Ponts ParisTech - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique - Département des Géosciences - ENS Paris - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres)

  • Peter Tankov

    (IP Paris - Institut Polytechnique de Paris, ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique)

Abstract

Investments into wind power generation may be hampered by the uncertainty of future revenues caused by the natural variability of the wind resource, the impact of climate change on wind potential and future electricity prices, and the regulatory risks. We quantify the uncertainty of the economic value of wind farms in France, Germany, and Denmark, and evaluate the cost of support mechanisms needed to ensure the profitability of wind farms under present and future climates. To this end, we built a localised model for wind power output and a country-level model for electricity demand and prices. Our study reveals that support mechanisms are needed for current market conditions and the current climate, as well as under future climate conditions according to several scenarios for climate change and energy transition. The cost of support mechanisms during a 15-year period is evaluated to EUR 3.8 to EUR 11.5 billion per year in France, from EUR 15.5 to EUR 26.5 billion per year in Germany, and from EUR 1.2 to EUR 3.3 billion per year in Denmark, depending on the scenario considered and the level of penetration of wind energy.

Suggested Citation

  • Bastien Alonzo & Silvia Concettini & Anna Creti & Philippe Drobinski & Peter Tankov, 2022. "Profitability and Revenue Uncertainty of Wind Farms in Western Europe in Present and Future Climate," Post-Print hal-03842344, HAL.
    • Handle: RePEc:hal:journl:hal-03842344
    DOI: 10.3390/en15176446
    Note: View the original document on HAL open archive server: https://hal.science/hal-03842344
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    References listed on IDEAS

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