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The influence of spatial effects on wind power revenues under direct marketing rules

Author

Listed:
  • Grothe, Oliver

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

  • Müsgens, Felix

    (Energiewirtschaftliches Institut an der Universitaet zu Koeln)

Abstract

In many countries worldwide, investment in renewable technologies has been accelerated by the introduction of fixed feed-in tariffs for electricity from renewable energy sources (RES). While fixed tariffs accomplish this purpose, they lack incentives to align the RES production with price signals. Today, due to a growing proportion of renewable electricity, the intermittency of most RES increases the volatility of electricity prices and might even prevent market clearing. Therefore, support schemes for RES have to be modified. Recently, Germany launched a market premium model which gives wind power operators the monthly choice to either receive a fixed feed-in tariff or to risk a - subsided - access to the wholesale electricity market. This paper quantifies the revenues of wind turbines under this new model and, in particular, analyzes whether, when and where producers may profit. We find that the position of the wind turbine within the country significantly influences revenues. The results are of interest and importance for wind farm operators deciding whether electricity should be sold in the fixed tariff or in the wholesale market.

Suggested Citation

  • Grothe, Oliver & Müsgens, Felix, 2012. "The influence of spatial effects on wind power revenues under direct marketing rules," EWI Working Papers 2012-7, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    • Handle: RePEc:ris:ewikln:2012_007
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    References listed on IDEAS

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    More about this item

    Keywords

    Wind Power; Market Premium Model; Optimal Areas of Production;
    All these keywords.

    JEL classification:

    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • 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

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