On the Development of Wind Market Values and the Influence of Technology and Weather: a German Case Study

Research into renewable energy market values is a popular field in energy economics. However, most contributions abstract from market values being highly individual and mostly study (nationwide) averages, usually based on a single or a “normal” wind year, if specifying wind conditions at all, and a limited set of technologies. However, market values of renewable energy resources are not monolithic but highly diverse. In this article, to shed light on this diversity, we illustrate the historical development of onshore wind’s market value in Germany, from 2001 to 2019, for the fleet and all operating wind energy converters. We use highly granular wind speed data and a comprehensive database of wind capacities. Our results show the downward trend, the distributions, and the variance of market values. In this context, we explain why the performance of a single wind energy converter (compared to the fleet’s performance) matters in the market premium model. Hereby, we also assess the magnitude of the outperformance of technologically advanced wind turbines as compared to less advanced turbines. In the second part of our research, we analyse the effect of the inter-annual weather variability on wholesale electricity prices, and market values. Our analysis is based on 19 different years of wind speeds, corresponding offshore and solar infeed, and an electricity market model to generate weather-congruent wholesale electricity prices.