<p><strong>Keywords:</strong> direct marketing, post-FiT, wind, spatial analysis</p><p>Within the coming ten years, more than 25 GW of onshore wind will reach the end of 20 year feed-in tariff (FiT) scheme according to the German Renewable Energy Law (EEG). This urges operators to take decision on repowering, lifetime extension or shutdown. In order to support the operators&#8217; decision this study discusses and analyses the economic potential of lifetime extension or shutdown. Due to the limited lifetime extension of post-FiT turbines, rather short-term alternative revenue schemes on the day-ahead market, either via direct marketing or via a merchant PPA, appear as a reasonable option.</p><p>For these post-FiT business models, the methodology at hand introduces a revenue and cost cascade. The value and cost categories derive from a power system perspective cascade introduced by Hirth et al. (2015) complemented by transaction costs and additional revenue streams, e.g. from Guaranties of Origin (GoO).</p><p>The applied spatial economic analysis calculates region-specific contribution margins for post-FiT wind turbines in Germany in two steps:</p><ul><li>Calculation of regionally dispersed value factors [%], market values [&#8364;/MWh<sub>el</sub>] and annual market revenues [&#8364;/MW] using hourly day-ahead price time series and hourly wind feed-in time series for German NUTS2 regions.</li>
<li>Identifying the distribution of wind turbine operational expenditures (OPEX) from the literature and analysing their regional-specific magnitude. Capital expenditures from the initial wind turbine investment or grid connection are considered as sunk costs and can be neglected.</li>
</ul><p>Subtracting spatial OPEX from spatial market values reveals region-specific contribution margins and the economic potential for continuing wind turbine operation. The conclusion is threefold:</p><ul><li>Location-specific market values strongly affect the contribution margin: year-to-year evolution of day-ahead price levels translates into high volatility of contribution margin. Capacity-dense regions show lower empirical market values. This trend of regional disparities will increase (Eising et al., 2020) due to increasing cannibalisation effect at ever-increasing wind market shares.</li>
<li>Variation in OPEX assumptions influence the locational contribution margins: the literature review on wind turbine OPEX levels reveals a wide assumption range between 21,4 &#8211; 46 &#8364;/MWh<sub>el</sub> and a data gap on actual OPEX for post-FiT wind turbines. In addition, the level distribution of cost causation in energy driven [&#8364;/MWh<sub>el</sub>] and capacity driven [&#8364;/MW] OPEX together with the regional variation in wind speeds leads to a significant regional OPEX sensitivity.</li>
<li>In general, wind-intense sites nowadays deliver higher contribution margins. This overperformance arises from higher absolute market revenues [&#8364;/MW] and relatively lower OPEX [&#8364;/MWh<sub>el</sub>]. However, relatively lower market values already appear in the observed timeframe 2006 - 2016 at capacity-dense regions in central-northern Germany.</li>
</ul><p>Overall, this study highlights the importance of acknowledging the spatial distribution of market values for analysis of business models, in particular for post-FiT wind turbines, instead of power system analysis as in the vast majority of market value studies.</p><p><strong>References</strong></p><p>Eising, Hobbie, M&#246;st, 2020. Future wind and solar power market values in Germany &#8212; Evidence of spatial and technological dependencies? Energy Econ. 86. https://doi.org/10.1016/j.eneco.2019.104638</p><p>Hirth, Ueckerdt, Edenhofer, 2015. Integration costs revisited &#8211; An economic framework for wind and solar variability. Renew. Energy 74. https://doi.org/10.1016/j.renene.2014.08.065</p>
Stress-based assessment of the lifetime extension for wind turbines