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

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 val...

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Bibliographic Details
Published in:Energies (Basel) 2022-09, Vol.15 (17), p.6446
Main Authors: Bastien Alonzo, Concettini, Silvia, Creti, Anna, Drobinski, Philippe, Tankov, Peter
Format: Article
Language:English
Subjects:
Alternative energy sources
Analysis
Buildings and facilities
Capital costs
Climate
Climate change
climate variability
Climatic conditions
Climatology
demand uncertainty
Earth Sciences
Economics
Electric power
Electric power demand
Electric power production
Electricity
Electricity pricing
Emissions
Energy industry
Engineering Sciences
Environment and Society
Environmental Sciences
Global temperature changes
Green technology
Industrial plant emissions
net present value
Power plants
Quantitative Finance
Renewable resources
Revenue
Sciences of the Universe
Subsidies
Sustainability
Time series
Uncertainty
wind energy
Wind farms
Wind power
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Summary: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.
ISSN:1996-1073
1996-1073
DOI:10.3390/en15176446