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Efficient spatial allocation of wind power plants given environmental externalities due to turbines and grids

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Negative environmental externalities associated with wind power plants depend on the physical characteristics of turbine installations and associated power lines and the geographical siting. We derive analytically an environmental taxation scheme for achieving the efficient spatial distribution of new wind power production, taking account of both production and environmental costs. Further, we illustrate the analytical results by means of a detailed numerical energy system model for Norway. We show that a given target for wind power production can be achieved at a significantly lower social cost by implementing a tax scheme, compared to the current situation with no environmental taxes. We also show that the environmental costs associated with both turbines and power lines were crucial to the efficient spatial allocation of wind power plants.

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  • Kristine Grimsrud & Cathrine Hagem & Arne Lind & Henrik Lindhjem, 2020. "Efficient spatial allocation of wind power plants given environmental externalities due to turbines and grids," Discussion Papers 938, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:938
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    1. Lehmann, Paul & Ammermann, Kathrin & Gawel, Erik & Geiger, Charlotte & Hauck, Jennifer & Heilmann, Jörg & Meier, Jan-Niklas & Ponitka, Jens & Schicketanz, Sven & Stemmer, Boris & Tafarte, Philip & Thr, 2021. "Managing spatial sustainability trade-offs: The case of wind power," Ecological Economics, Elsevier, vol. 185(C).

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    More about this item

    Keywords

    Wind power; wind power plant; renewable energy; environmental externalities; environmental taxes; energy system model;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • 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
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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