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

Oliver Grothe () and Felix Müsgens ()
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Oliver Grothe: Energiewirtschaftliches Institut an der Universitaet zu Koeln
Felix Müsgens: Energiewirtschaftliches Institut an der Universitaet zu Koeln

No 2012-7, EWI Working Papers from Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)

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.

Keywords: Wind Power; Market Premium Model; Optimal Areas of Production (search for similar items in EconPapers)
JEL-codes: C39 C53 Q42 Q47 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2012-03-09
New Economics Papers: this item is included in nep-ene
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ewikln:2012_007

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