Employing a continuous-time real options modeling framework, this paper scrutinizes the incentives to invest in German offshore wind farms. The focus of the analysis is the mode of action of the German feed-in tariff system for offshore wind energy deployment. The numerical results reveal that the long term subsidies in Germany set prices that provide higher returns than needed to secure investment, even when taking the uncertainties involved into account. The results obtained can be used by policy-makers to design comprehensive and efficient offshore wind energy support measures.
|Place of Publication||CESifo, Center for Economic Studies; Ifo Institute, Munich|
|Publisher||CESifo Group Munich|
|Number of pages||24|
|Publication status||Published - Jun 2015|
|Name||CESifo Working Papers Series|
- real options
- offshore wind energy
- feed-in tariff
- tender bidding
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
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- University of Dundee School of Business - Senior Lecturer (Teaching and Research)