Abstract
In this paper, we investigate capacity expansion, the technological development of wind turbine generators, and the merits of onshore wind repowering in Germany. We analyze the regulatory framework that is presently in place and its impact on the profitability of the onshore wind parks commissioned under previous regulatory frameworks. The optimal timing of repowering under today’s market premium model is scrutinized. Repowering in a market without subsidies for onshore wind energy is also evaluated. In the two cases (regimes) investigated, the electricity price is modeled stochastically as a geometric Brownian motion process. More specifically, using a real options modeling framework for investments under a free market regime, we analyze how the regime change affects the optimal timing of repowering. Further, we check the results for their robustness via a sensitivity analysis for both analyzed regimes. We find that repowering well before the plant’s expected end of life (‘early repowering’) can be economically preferable under the German Renewable Energy Sources Act 2017 remuneration scheme and that, due to the electricity spot market price development, repowering under the market premium regime is more profitable than it is under the free market regime. The economic viability is strongly influenced by the duration of the initial tariff granted to the old installation, the expected digression factor of the future reference tariff, and the increase in electricity generation achieved through repowering.
Highlights
The European Commission passed indicative climate and energy targets for member countries for the first time in 2001 [1]
In this paper, we investigate capacity expansion, the technological development of wind turbine generators, and the merits of onshore wind repowering in Germany
The added capacity was supposed to be controlled by. In this we present ourtariffs models for evaluating the optimal timing of onshore repowering adjusting thesection, digression rate of the for installations commissioned after January
Summary
The European Commission passed indicative climate and energy targets for member countries for the first time in 2001 [1]. Energies 2019, 12, 4703 ones, in contrast to developing a greenfield project This carries inter alia the possibility for further net capacity additions and often yields a significant increase in renewable electricity generation, which can contribute substantially to reaching national and EU targets. The investment conditions set by national policy frameworks are essential for onshore wind repowering to be economically feasible and, in general, for further RES additions. As policy schemes are under constant revision by national legislators, and by the EU Commission, they can change quite frequently The latter recently passed the “Guidelines on state aid for environmental protection and energy 2014–2020”, which oblige member states to implement more market-oriented.
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