Impact of renewable energy act reform on wind project finance

Arbeitspapier

The 2014 reform of the German Renewable Energy Act introduces a mandatory shift from a fixed feed-in tariff to a floating premium system. This is envisaged to create additional incentives for project developers, but also impacts revenues and costs for new investments in wind generation. Thus uncertainties for example about balancing costs and the impact of the location specific generation profile on the average price received by a wind project are allocated to renewable projects. We first estimate the magnitude of the impacts on wind projects based on historic and cross-country comparison. We then apply a cash-flow model for project finance to illustrate to what extent the impact of the uncertainty for project investors reduces the scale of debt that can be accessed by projects and thus increases financing costs.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: DIW Discussion Papers ; No. 1387

Classification and Topics

• Classification: Wirtschaft ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Economics of Regulation ; Electric Utilities
• Subject: feed in tariff ; financing renewables ; project finance

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Tisdale, Matthew ; Grau, Thilo ; Neuhoff, Karsten
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/97633
• Last update: 10.03.2025, 11:43 AM CET