Energiewende @ Risk: On the Continuation of Renewable Power Generation at the End of Public Policy Support

Abstract

This paper aims to analyze what happens with renewable energy power plants, such as onshore wind, photovoltaics and biomass, when the public policy support based on the Renewable Energy Law expires. With its expiration, the first renewable energy (and especially onshore wind) power plants will have to be scrutinized as to whether they can economically continue operation, whether they have to be repowered, or whether they need to be decommissioned. The relative merits of these three alternatives are evaluated by applying real options analysis. In contrast to traditional project evaluation techniques, the real options approach takes advantage of the use of uncertain parameters included in the model, such as the development of the electricity price or electricity output. The results obtained suggest that parameters such as the level of future operation and maintenance costs, the expected development of the electricity price at the spot market, and the interrelations between these, as well as the development of the electricity output from renewables can significantly affect the profitability of these power plants and thus impact the decision about their further optimal operation.

Optimal Timing of Onshore Wind Repowering in Germany under Policy Regime Changes: A Real Options Analysis

“…For that reason, the probability to repower is higher only at the end of the wind turbines' lifetime. Interesting results related to this study can also be found in [36], where an analysis was performed on the profitable operation of wind parks after the expiration of their lifetime and subsidy schemes.…”

“…Therefore, the German government passed the Electricity Feed-In Law (Stromeinspeisungsgesetz, StrEG) in 1991. This was the first law subsidizing RES-E in Germany, superseded in 2000 by the EEG (Erneuerbare Energien Gesetz), which has been amended six times since then (see [36], Appendix A, for a useful overview). The following section examines in some detail the development of the remuneration for onshore wind energy provided by the two renewable energy laws StrEG and EEG.…”

“…The proposed approach allows for the analysis of (1) when to repower the wind turbines, if their operation is under the market premium model, and whether it is profitable, and (2) whether the wind power turbine should be further operated after repowering (over the second decade of its operation lifetime) under the FIT regime. The disinvestment of old turbines due to non-profitable operation under the new regime beyond the EEG support scheme has been studied in [36].…”

Coupling of Rural Energy Structure and Straw Utilization: Based on Cases in Hebei, China

“…In Austria, government grants that cover 30% of the investment cost have encouraged companies and homeowners to install biomass heating systems that burn wood chips or pellets, so that biomass fuels one-third of the heating market [51]. Renewable energy technologies in Germany still enjoy a privileged position regarding their diffusion and marketing [52]. At present, in addition to subsidies for the price of biomass power generation in China, other biomass utilization projects are handled by local governments [53].…”

Electric Power System Operation Mechanism with Energy Routers Based on QoS Index under Blockchain Architecture

“…With the large-scale access of highly permeable renewable energy, the diversity and uncertainty of energy forms increase the complexity of power output and distribution [7]. Simultaneously, the phenomenon of "abandoning or curtailing wind, solar and hydro," in some areas leads to poor coordination and matching ability between the source side and the grid side [8,9]. Moreover, the dual overlaying of source and load volatility under renewable energy access leads to the bidirectionalization of power flow and complicating the control mechanism.…”