Assessing the economic wind power potential in Austria

In the European Union, electricity production from wind energy is projected to increase by approx. 16% until 2020. The Austrian energy plan aims at doubling the currently installed wind power capacity from approx. 1 GW to 2 GW until 2020 including an additional capacity of 700 MW until 2015. The aim of this analysis is to assess economically viable wind turbine sites by considering current feed-in tariffs as well as geological and ecological constraints in Austria. Furthermore, we analyse whether the policy target of installing an additional wind power capacity of 700 MW until 2015 is under current legislation attainable. Results show that the current feed-in tariff of 9.7 ct kWh^-1 may trigger an additional installation of 3,544 MW implying that the current feed-in tariff is too high and may result in overshooting the targets for wind power deployment. To attain the targets more cost-effectively, a feed-in tariff of 9.1 ct kWh^-1 would be sufficient. Windfall profits at favourable wind energy sites would be limited and economic welfare losses reduced. Therefore, policy makers should lower the current feed-in tariff and then should gradually increase it to (i) limit windfall profits at favourable sites, and predominantly (ii) incentivize additional wind power capacities at marginal sites, and (iii) minimize deadweight losses of policy intervention.