Optimal over installation of wind generation facilities
Journal
Energy Economics
Subject
Management Science and Operations
Publishing details
Authors / Editors
McInerney C; Bunn D W
Biographies
Publication Year
2016
Abstract
This paper evaluates the economic benefits to over-installing turbines on capacity-constrained wind farm sites in order to capture more energy at low wind speeds. Although this implies curtailment at high wind speeds, we show that over installing generation facilities can increase returns to investors and reduce system costs. A detailed model-based analysis is developed using British data, with variations in the range of over installation, the renewable policy support systems (fixed feed-in tariffs or green certificate premia to wholesale energy prices) and the extent of replacement of fossil generation in the technology mix with wind. In the cases of premia to market prices, we use agent-based, computational learning and risk simulation to model market prices. Not only is over installation beneficial under fixed feed-in tariffs, but is more so under premia to market prices and increasingly so as wind replaces fossil generation.
Keywords
Capacity investment; Wind power generation; Electricity markets; Power system economics; Risk; Agent-based simulation; Investment appraisal
Available on ECCH
No
