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Open AccessArticle

Energiewende @ Risk: On the Continuation of Renewable Power Generation at the End of Public Policy Support

1
Institute for Future Energy Consumer Needs and Behavior (FCN), School of Business and Economics/E.ON Energy Research Center, RWTH Aachen University, Mathieustrasse 10, 52074 Aachen, Germany
2
Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology (NTNU), 7491 Trondheim, Norway
*
Author to whom correspondence should be addressed.
Energies 2019, 12(19), 3616; https://doi.org/10.3390/en12193616
Received: 31 August 2019 / Revised: 15 September 2019 / Accepted: 16 September 2019 / Published: 22 September 2019
(This article belongs to the Special Issue Economics of Sustainable and Renewable Energy Systems)
This paper aims to analyze what happens with renewable energy power plants, such as onshore wind, photovoltaics and biomass, when the public policy support based on the Renewable Energy Law expires. With its expiration, the first renewable energy (and especially onshore wind) power plants will have to be scrutinized as to whether they can economically continue operation, whether they have to be repowered, or whether they need to be decommissioned. The relative merits of these three alternatives are evaluated by applying real options analysis. In contrast to traditional project evaluation techniques, the real options approach takes advantage of the use of uncertain parameters included in the model, such as the development of the electricity price or electricity output. The results obtained suggest that parameters such as the level of future operation and maintenance costs, the expected development of the electricity price at the spot market, and the interrelations between these, as well as the development of the electricity output from renewables can significantly affect the profitability of these power plants and thus impact the decision about their further optimal operation. View Full-Text
Keywords: renewable energy; real options; energy market; policy support; repowering renewable energy; real options; energy market; policy support; repowering
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Glensk, B.; Madlener, R. Energiewende @ Risk: On the Continuation of Renewable Power Generation at the End of Public Policy Support. Energies 2019, 12, 3616.

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