Wind power has undergone impressive technological development, and projects are now being developed that are profitable without government support. Wind power development in the Nordics, and Northern Europe more generally, is critical to achieving Europe’s long-term climate goals. At the same time, greater wind power generation will require a more flexible power system.
One challenge for wind power development is the diversity of regulatory frameworks, something that becomes ever more important as wind power is increasingly developed on commercial terms. Particularly important are the terms governing connections and the use of the network. Tax systems for wind power generators are also different. THEMA has an in-depth knowledge of the regulatory framework governing wind power in the countries bordering the North and Baltic Seas from projects completed on behalf of the Nordic authorities, the European Commission and investors.
Depending on where one invests in wind power, one may also be eligible for different support schemes. THEMA has an overview of the various support schemes for wind power generation in Europe and provides price forecasts for both the Norwegian/Swedish elcertificates market and the market for Guarantees of Origin.
Owing to the availability of good wind resources, we have seen strong growth in wind power investments in Norway and Sweden. However, wind generation is inherently variable, as generation cannot occur when the wind is not blowing. One implication of this is that wind power generators do not capture the average power price, as a result of the so-called cannibalisation effect. The cannibalisation effect refers to the fact that power prices will tend to be low in those hours when wind power output is high because wind power output cannot be controlled and, consequently, wind power generators in an area are likely to all generate simultaneously.
All of THEMA’s power price forecasts provide hourly prices and the actual prices captured by wind and solar generators. We also offer comprehensive investment analysis, a project financing model and project-specific valuations.
European wind power capacity developments
THEMA follows wind power developments across Europe. We maintain an overview of capacity developments and the location of wind power projects and analyse both the profitability of the projects and the influence of capacity developments on the power market. We have constructed a wind power database covering projects’ locational, technical and economic parameters. The database is used to assess the long-term supply curve for wind power and can be used for both socio-economic and business analyses.
We also provide analysis of alternative Power Purchase Agreement (PPA) arrangements and support the pricing of such contracts.
See also Investment support and PPA analysis.