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Scrapping a Wind Turbine: Policy Changes, Scrapping Incentives and Why Wind Turbines in Good Locations Get Scrapped First

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  • Johannes Mauritzen

Abstract

The most common reason for scrapping a wind turbine in Denmark is to make room for a newer turbine. The decision to scrap a wind turbine is then highly dependent on an opportunity cost that comes from the interaction of scarce land resources, technological change and changes in subsidy policy. Using a Cox regression model I show that turbines that are located in areas with better wind resources are at a higher risk of being scrapped. Policies put in place in order to encourage the scrapping of older, poorly placed turbines actually have a larger effect on well-placed turbines.

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  • Johannes Mauritzen, 2014. "Scrapping a Wind Turbine: Policy Changes, Scrapping Incentives and Why Wind Turbines in Good Locations Get Scrapped First," The Energy Journal, , vol. 35(2), pages 157-182, April.
    • Handle: RePEc:sae:enejou:v:35:y:2014:i:2:p:157-182
    DOI: 10.5547/01956574.35.2.8
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    References listed on IDEAS

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    1. Gaumnitz, Jack E. & Emery, Douglas R., 1980. "Asset Growth, Abandonment Value and the Replacement Decision of Like-for-Like Capital Assets," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 15(2), pages 407-419, June.
    2. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
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