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An Innovative Model for the Sustainability of Investments in the Wind Energy Sector: The Use of Green Sukuk in an Italian Case Study

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  • Donato Morea

    (Department of Industrial Engineering, University of Rome Tor Vergata, Rome, Italy)

  • Luigi Antonio Poggi

    (Department of Industrial Engineering, University of Rome Tor Vergata, Rome, Italy)

Abstract

In this paper we present the technical-energy-economic feasibility of wind power systems. An Italian 1 megawatt case study was considered to evaluate the importance of incentives in order to achieve the grid parity. Due to the severe reduction of incentives in the last years, in the present work we propose the use of Sukuk, a Shari ah-compliant instrument used in the Islamic finance, as an alternative financial instrument used to limit the extent of leverage associated with financing. The building cost thresholds necessary to achieve the grid parity and a profitable and bankable project are presented with a sensitivity analysis. In the framework of the efforts against climate change and the emission of greenhouse gas, our results evidenced the importance of incentives and the applicability of the use of Shari ah-compliant sukuk instruments in order to provide a feasible and sustainable investment in the wind energy sector.

Suggested Citation

  • Donato Morea & Luigi Antonio Poggi, 2017. "An Innovative Model for the Sustainability of Investments in the Wind Energy Sector: The Use of Green Sukuk in an Italian Case Study," International Journal of Energy Economics and Policy, Econjournals, vol. 7(2), pages 53-60.
    • Handle: RePEc:eco:journ2:2017-02-07
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    More about this item

    Keywords

    Wind Energy; Grid Parity; Green Sukuk;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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