Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/113732 
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper No. 5408
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Employing a continuous-time real options modeling framework, this paper scrutinizes the incentives to invest in German offshore wind farms. The focus of the analysis is the mode of action of the German feed-in tariff system for offshore wind energy deployment. The numerical results reveal that the long term subsidies in Germany set prices that provide higher returns than needed to secure investment, even when taking the uncertainties involved into account. The results obtained can be used by policy-makers to design comprehensive and efficient offshore wind energy support measures.
Subjects: 
real options
offshore wind energy
feed-in tariff
tender bidding
Germany
JEL: 
C61
D92
E22
H23
O33
Document Type: 
Working Paper
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