Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/172839 
Year of Publication: 
2017
Series/Report no.: 
EWI Working Paper No. 17/09
Publisher: 
Institute of Energy Economics at the University of Cologne (EWI), Köln
Abstract: 
In recent years, the installed capacities of renewable energies have steadily been increasing. This raises the question for optimal locations of renewables. Ideally, the market prices induce efficient locations. Distorting effects, i.e. non incorporation of the physical grid situations, could lead to sub-optimal regional incentives compared to a system optimal perspective. In this paper, the wind production revenues under nodal and zonal pricing are investigated. The analysis is extended to the widely used wind value factor. The analysis identifies the zonal pricing wind revenues as inefficient location signals. Location signals need to consider the grid situations. Wind revenues could face an average increase of 21% and more than 200% for certain locations. This is highly relevant to design efficient subsidy schemes or to identify regional grid and capacity extension necessities.
Subjects: 
Optimal Wind Locations
Wind Production
Market Revenues
Market Value
Electricity System Model
Nodal Pricing
Zonal Pricing
JEL: 
Q42
Q48
Document Type: 
Working Paper

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