Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315017 
Year of Publication: 
2025
Series/Report no.: 
HEMF Working Paper No. 01/2025
Publisher: 
University of Duisburg-Essen, House of Energy Markets & Finance (HEMF), Essen
Abstract: 
The spatial distribution of future renewable capacities is a key determinant for developing appropriate grid expansion plans. This is particularly relevant for onshore wind energy. Existing studies mostly extrapolate future installations based on existing capacities and available sites. As wind farm projects are developed mainly by private investors, the economic rationale of investing at specific sites deserves more attention. Therefore, the present contribution develops a model of economic choice for wind investments based on site-specific computations of the achievable net present value, taking into consideration the land availability at the regional level. Therefore, sitespecific investment decisions are modeled as (partly aggregated) discrete choices. The net present value is computed from investment costs and expected yields, which can be estimated based on wind speed time series and power curves. Available land can be identified by excluding settlement, infrastructure, and nature conservation areas with appropriate buffers, as well as sites with topographically unsuitable profiles. The model is formulated as a nested logit model that captures the interdependencies between choices on two levels: the probability of investment in a particular region on the first level and the probability of installing a specific turbine type on the second level. In an application for Germany with the target capacities of the German Renewable Energy Act, the model delivers a spatial distribution of the capacities at the NUTS 3 level. The model also enables the derivation of the necessary compensation level and the most frequently installed turbine types.
Subjects: 
wind energy
regionalization models
renewable energy sources
nested logit model
JEL: 
Q42
Q48
C35
R58
Document Type: 
Working Paper

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