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Economics of Small Wind Power Plants in Urban Settings: An Empirical Investigation for Germany

Author

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  • Grieser, Benno

    (RWTH Aachen University)

  • Madlener, Reinhard

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

  • Sunak, Yasin

    (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))

Abstract

In this paper we investigate the location-specific attractiveness of small wind turbines (SWT) for private households. In order to assess the economic viability of an investment in SWT, we analyze a set of scenarios that incorporate different types of SWT, various storage system options, support schemes, and specific urban surroundings for the case of Germany. As urban structures substantially influence local wind speeds, and hence the potential energy yield of a turbine, the potential location of the SWT in the urban area is crucial for the economic feasibility. We find that SWT today are only profitable under very favorable conditions, the most important parameters being prevailing wind speeds and the location’s degree of urbanization. In most cases, the coupling of the SWT to a storage system is crucial for cost-effectiveness. A feed-in tariff system specifically adapted to the SWT technology is found to be an important driver of diffusion. Further research needs are identified in the field of long-term performance and yield projections for SWT. Based on the findings from our study, significant SWT diffusion can be expected, if at all, only in coastal suburban and rural areas.

Suggested Citation

  • Grieser, Benno & Madlener, Reinhard & Sunak, Yasin, 2013. "Economics of Small Wind Power Plants in Urban Settings: An Empirical Investigation for Germany," FCN Working Papers 1/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    • Handle: RePEc:ris:fcnwpa:2013_001
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    References listed on IDEAS

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    1. Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
    2. Ross, S.J. & McHenry, M.P. & Whale, J., 2012. "The impact of state feed-in tariffs and federal tradable quota support policies on grid-connected small wind turbine installed capacity in Australia," Renewable Energy, Elsevier, vol. 46(C), pages 141-147.
    3. Anselm Mattes, 2012. "Grüner Strom: Verbraucher sind bereit, für Investitionen in erneuerbare Energien zu zahlen," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 79(7), pages 2-9.
    4. Abohela, Islam & Hamza, Neveen & Dudek, Steven, 2013. "Effect of roof shape, wind direction, building height and urban configuration on the energy yield and positioning of roof mounted wind turbines," Renewable Energy, Elsevier, vol. 50(C), pages 1106-1118.
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    Cited by:

    1. Rohlfs, Wilko & Madlener, Reinhard, 2013. "Challenges in the Evaluation of Ultra-Long-Lived Projects: Risk Premia for Projects with Eternal Returns or Costs," FCN Working Papers 13/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    2. Harmsen - van Hout, Marjolein & Ghosh, Gaurav & Madlener, Reinhard, 2013. "An Evaluation of Attribute Anchoring Bias in a Choice Experimental Setting," FCN Working Papers 6/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    3. Harmsen - van Hout, Marjolein & Ghosh, Gaurav & Madlener, Reinhard, 2013. "The Impact of Green Framing on Consumers’ Valuations of Energy-Saving Measures," FCN Working Papers 7/2013, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).

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    More about this item

    Keywords

    small wind turbine; energy storage; urban environment; feed-in tariffs;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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