Accelerating the Diffusion of Wind Power: An Analysis of Resistance Factors

Kobayashi K (2005). Accelerating the Diffusion of Wind Power: An Analysis of Resistance Factors. IIASA Interim Report. IIASA, Laxenburg, Austria: IR-05-006

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Abstract

This paper describes the use of a combination of learning-by-doing (LBD) and benefitcost analysis (BCA) using a Dynamic Programming method with stochastic assumption analysis to identify factors of resistance to the diffusion of wind turbine generators. To do so, we must take into consideration that there is a "waiting option" while -- assuming the LBD concept in operation -- the price comes down in a competitive market.

The application of the stochastic and dynamic programming model using real data on the diffusion of wind power generation in Germany, from 1990 to 2000, confirmed that the concept of the combination will affect the acceleration of diffusion of wind turbines where investors seek to optimize their investments to maximize their profit.

The model also suggests the risk of a vicious-circle retarding diffusion, especially with the "wait and postpone" decision method. Although the "wait and concentrate investment" decision method has the ability to allow investors to earn more effectively without negative effects for the diffusion, it only appears when there is sufficient manufacturers' ability to manufacture wind turbines. If there are low demands, there is always high risk of the vicious cycle of lower diffusion, no matter which decision method investors take. Effective countermeasures aiming at stimulating demands may be promoting wind technology as a good investment. We must analyze this vicious-cycle situation and establish the countermeasures by using subsidies, taxations, other regulations, and effectual investor relation (IR). The decision makers, responsible for making rules on taxations, subsidies, and other regulations, should take into consideration these effects which are caused by the application of the LBD.

Item Type: Monograph (IIASA Interim Report)
Research Programs: Environmentally Compatible Energy Strategies (ECS)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 02:18
Last Modified: 06 Nov 2016 19:43
URI: http://pure.iiasa.ac.at/7829

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