Profitability and Revenue Uncertainty of Wind Farms in Western Europe in Present and Future Climate

Bastien Alonzo (1) , Silvia Concettini (2, 3) , Anna Creti , Philippe Drobinski (4) , Peter Tankov (5, 6)

1 DIRSE - Météo-France Direction Interrégionale Sud-Est
2 EconomiX - EconomiX
3 IRJI - Institut de recherche juridique interdisciplinaire
4 LMD - Laboratoire de Météorologie Dynamique (UMR 8539)
5 IP Paris - Institut Polytechnique de Paris
6 ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique

Investments into wind power generation may be hampered by the uncertainty of future revenues caused by the natural variability of the wind resource, the impact of climate change on wind potential and future electricity prices, and the regulatory risks. We quantify the uncertainty of the economic value of wind farms in France, Germany, and Denmark, and evaluate the cost of support mechanisms needed to ensure the profitability of wind farms under present and future climates. To this end, we built a localised model for wind power output and a country-level model for electricity demand and prices. Our study reveals that support mechanisms are needed for current market conditions and the current climate, as well as under future climate conditions according to several scenarios for climate change and energy transition. The cost of support mechanisms during a 15-year period is evaluated to EUR 3.8 to EUR 11.5 billion per year in France, from EUR 15.5 to EUR 26.5 billion per year in Germany, and from EUR 1.2 to EUR 3.3 billion per year in Denmark, depending on the scenario considered and the level of penetration of wind energy.

Domaines: Climatologie; Environnement et Société; Energie électrique; Économie et finance quantitative [q-fin]

Bastien Alonzo, Silvia Concettini, Anna Creti, Philippe Drobinski, Peter Tankov. Profitability and Revenue Uncertainty of Wind Farms in Western Europe in Present and Future Climate. Energies, 2022, 15 (17), pp.6446. ⟨10.3390/en15176446⟩. ⟨hal-03842344⟩