Going offshore: Investments in German wind energy under uncertainty

Yu-Fu Chen, Michael Funke

    Research output: Working paperDiscussion paper

    Abstract

    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.
    Original languageEnglish
    Place of PublicationCESifo, Center for Economic Studies; Ifo Institute, Munich
    PublisherCESifo Group Munich
    Number of pages24
    Volume2015-06
    ISBN (Electronic)2364-1428
    ISBN (Print)2364-1428
    Publication statusPublished - Jun 2015

    Publication series

    NameCESifo Working Papers Series
    PublisherCESifo
    No.5408
    Volume2015-6
    ISSN (Print)2364-1428
    ISSN (Electronic)2364-1428

    Keywords

    • real options
    • offshore wind energy
    • feed-in tariff
    • tender bidding
    • Germany

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    Chen, Yu-Fu

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