Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/74395
Authors: 
Grothe, Oliver
Müsgens, Felix
Year of Publication: 
2012
Series/Report no.: 
EWI Working Paper 12/07
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.
Subjects: 
Wind Power
Market Premium Model
Optimal Areas of Production
JEL: 
C39
C53
Q42
Q47
Document Type: 
Working Paper

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