Incorporating Electricity Prices in Wind Turbine Design: Introducing the AEV Metric

Abstract

This paper addresses the challenge of incorporating electricity prices into wind turbine design methods and shows how price volatility drives wind turbines towards larger rotors and lower specific power. Since wind speed and electricity prices fluctuate, current efforts to estimate a wind turbine’s revenue are based on time-series approaches. However, this paper presents a new way of accounting for price volatility based on wind distributions, which is computationally cheap and easily integrates with current wind turbine and farm design methods and tools. The new method demonstrates that a traditional wind turbine can lose more than 15% of its revenue in open energy markets like Denmark due to price volatility. Designing turbines with lower specific power can substantially increase revenue by producing more energy at low wind speeds with higher energy demand and electricity prices.