Using economic indicators in a simple model to predict annual growth in the wind energy industry
R.H.W. Aarnink (TU Delft - Technology, Policy and Management)
K Blok – Mentor (TU Delft - Energy and Industry)
Enno Schröder – Graduation committee member (TU Delft - Economics of Technology and Innovation)
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Abstract
Climate change is going to be the main problem this and future generations will face. Wind energy is promising to be one of the industries that could help mitigate this impending crisis. In literature many different models and predictions can be found to describe the possible futures of wind energy. But there is still a lot of uncertainty in this field as to what factors play which role in its development.
This research contributes to this challenge by comparing the economic attractiveness of windmills expressed as Net Present Value(NPV) with annual added wind capacity in five countries for 2008 till 2019. The countries used for this research are Germany, Denmark, Canada, Texas and Sweden. This research found an exponential relationship between the NPV and added wind power capacity. A 10% increase in NPV(AC/MWh) found an increase of 15% for the annual added wind capacity(MW/TWh) of added windmill capacity per TWh of electricity produced. The vast amount of data sources used could have lead to a higher uncertainty regarding their uniformity and trustworthiness. Doing a sensitivity analysis yielded no improvements in the results. The simple economic model used was able to describe the growth in wind energy in countries, though there is still a significant spread in the results. A likely explanation for this spread is the lack of several important aspects such as permits, company influences, cultural differences and social-economic challenges which were all not taken into account. This research also makes several recommendations regarding possible policies countries could in order for them to reach their wind or clean energy goals.