Managing Wind Turbine Generators with a Profit Maximized Approach

Dominik McInnis and Massimiliano Capezzali
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Dominik McInnis: Alpiq AG, Chemin de Mornex 10, 1003 Lausanne, Switzerland
Massimiliano Capezzali: School of Management and Engineering Vaud (HEIG-VD), Institute for Energy and Electrical Systems, 1401 Yverdon-les-Bains, Switzerland

Sustainability, 2020, vol. 12, issue 17, 1-16

Abstract: In Europe, at least 3 GW installed capacity of wind turbine generators (WTG) will fall out of subsidy schemes every year from 2021 onwards. An estimated 50% of this capacity cannot be replaced with new WTG due to commercial and legal restrictions. The remaining options are either to sell the electricity without subsidies on the wholesale electricity market—a novelty for most WTG, as most are receiving a feed-in tariff—or their dismantlement. Since the electricity market fixes the price at the intersection of demand and short run marginal production costs, WTG might struggle to generate enough revenues to cover their costs. This paper proposes an innovative commercialization strategy for WTG after the end of the feed-in tariff, namely a profit-maximized approach that focuses on synergies between revenues and costs when increasing the curtailments of the WTG. The two key elements of this approach are a more flexible and variable cost structure and a central overall optimization process. The paper proves the potential of this new strategy and highlights the necessity of further research for WTG at the end of their lifetime from a technical and commercial perspective, due to the impact on the initial investment decision and best allocation of subsides.

Keywords: WTG profit maximization; remaining useful lifetime (RUL); WTG commercialization; curtailment of WTG (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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