A Novel Market Value Meso-scale Atlas of Germany

Introduction

The Germany "hinterland" of wind energy are areas where the view from the nacelle of wind turbines is even more spectacular than in the strong-wind coastal areas. This is not only true due to the higher wind towers required to capture sufficient wind speed but also from the perspective of the wind parks' market value. Wind parks located in some of the German hinterland areas compensate lower production rates with higher spot prices at the European Power Exchange EPEX. Here we identify those high price areas with a novel Market Value Atlas.

Approach

The Market Value Atlas provides a decision making tool for investors. The Atlas re-evaluates the market value of a wind turbine at any location in Germany. It follows a hind-cast approach to evaluate the total value of wind power production under a free market scenario on the spot market.

Main body of abstract

The Market Value Atlas is set up in two steps: we first evaluate the historic wind power production at high resolution over Germany. This is based on meso-scale modelling of the wind speeds and other relevant meteorological parameters. These meso-scale wind information is transformed into power production for selected wind turbines. At the end it defines the quantity (of power production) which might be traded at the spot market for each hour of the last 10 years.

Market prices from the EESP (formerly EEX) are available for each hour since 2006. These pricing information is used to reproduce the market value for each hour of the last ten years for selected wind turbines and at any location within Germany.

While the wholesale spot prices are equal for all participating wind farms, some farms are more equal than others, when considering the profits over a year per sold MWh.

The essential differences are based on the daily fluctuation of energy prices at the spot market. It comes out that e.g. wind parks located at the coastal areas along the North Sea supply wind power at adverse times when prices are low. Some hinterland located wind farms feed power at times of peak demand. This way low wind areas may profit from higher prices. On annual average the discrepancy in price per MWh can be as large as 10%.

Conclusion

Market value of wind parks follows classic financial terms: total return is determined by quantity and price. Under the ongoing anticipation from fixed feed-in tariffs and start of wind power auction the market value of a wind park will supersede quantity oriented power production. The market value atlas is an instrument which identifies both: quantities of produced power and price per produced power. Enlightening of both is required. The market value atlas is intended to do so.


Learning objectives
- market value of wind parks
- low wind regimes does not imply low market price