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Kitzing, Lena

Publications and source records attributed to Kitzing, Lena.

6 records
All sourcesNASA NTRSDOE OSTI
DOE OSTI2023

The enduring role of contracts for difference in risk management and market creation for renewables

Governments procure renewables through a variety of mechanisms. Contracts for difference (CfDs) have been used for more than 50% of the global offshore wind supply. The payments awarded through CfDs are sometimes labelled subsidies, suggesting that they support uneconomic activity. Here, in this study, we argue that the primary role of CfDs is rather risk management by creating a market for electricity supply at stable long-term prices. Similar to its use in other sectors of the economy, this contract type transforms a variable to a fixed price to reallocate volatility risks. Such long-term contracts are often necessary for renewables financing due to limited hedging options in existing markets. Our perspective could imply a shift in perception towards CfDs as a fundamental and lasting market feature. We hope to stimulate a timely discussion about the impact of greater CfD diffusion on electricity market mechanisms, risk allocation and the potential for combining fragmented streams of energy finance, market and policy research.

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2023

Five grand challenges of offshore wind financing in the United States

Offshore wind energy has the potential to play a critical role in fostering a renewable energy transformation in the United States. This owes to its massive technical potential, strategic location near densely populated coastlines, and - relative to onshore wind and solar - high capacity factors and consistent production. The Biden Administration's target to build 30 GW of offshore wind capacity by 2030 (from 0.04 GW today) requires the creation and swift development of a new industry that interlinks the wind and power industries with the maritime sector. Critical to its success is financing. While financial capital is abundant, deploying it for offshore wind faces major challenges. We identify and describe five grand challenges affecting offshore wind finance in the U.S. Failing to address these challenges may put deployment targets at risk. The challenges include (1) Early years financing: navigating the complexities, timing mismatches, and high costs of projects in the development phase; (2) Policy support for project financial solvency: addressing the uncertainty and systematic transfers of tax credits away from offshore wind, characteristic of the U.S. Investment Tax Credit; (3) Workforce development: building a skilled workforce for an emerging market; (4) Transmission and integration barriers: upgrading the power grid to reliably support large scale offshore wind integration; and (5) Floating wind development: financing the development and scale-up of floating offshore wind technologies. The second challenge has already been solved to a large extent by the Inflation Reduction Act.

17 WIND ENERGY↗
DOE OSTI2022

Grand Challenges: wind energy research needs for a global energy transition

Wind energy is anticipated to play a central role in enabling a rapid transition from fossil fuels to a system based largely on renewable power. For wind power to fulfill its expected role as the backbone – providing nearly half of the electrical energy – of a renewable-based, carbon-neutral energy system, critical challenges around design, manufacture, and deployment of land and offshore technologies must be addressed. During the past 3 years, the wind research community has invested significant effort toward understanding the nature and implications of these challenges and identifying associated gaps. The outcomes of these efforts are summarized in a series of 10 articles, some under review by Wind Energy Science (WES) and others planned for submission during the coming months. This letter explains the genesis, significance, and impacts of these efforts.

17 WIND ENERGY↗
DOE OSTI2022

Policy choices and outcomes for offshore wind auctions globally

Offshore wind energy is rapidly expanding, facilitated largely through auctions run by governments. We provide a detailed quantified overview of utilised auction schemes, including geographical spread, volumes, results, and design specifications. Our comprehensive global dataset reveals heterogeneous designs. Although most auction designs provide some form of revenue stabilisation, their specific instrument choices vary and include feed-in tariffs, one-sided and two-sided contracts for difference, mandated power purchase agreements, and mandated renewable energy certificates. We review the schemes used in all eight major offshore wind jurisdictions across Europe, Asia, and North America and evaluate bids in their jurisdictional context. We analyse cost competitiveness, likelihood of timely construction, occurrence of strategic bidding, and identify jurisdictional aspects that might have influenced auction results. We find that auctions are embedded within their respective regulatory and market design context, and are remarkably diverse, though with regional similarities. Auctions in each jurisdiction have evolved and tend to become more exposed to market price risks over time. Less mature markets are more prone to make use of lower-risk designs. Still, some form of revenue stabilisation is employed for all auctioned offshore wind energy farms analysed here, regardless of the specific policy choices. Our data confirm a coincidence of declining costs and growing diffusion of auction regimes.

17 WIND ENERGY↗
DOE OSTI2021

Chapter 4: Wind Energy Politics and Economics

A new paradigm for wind energy policy is emerging that is driven by rapidly decreasing costs, increasing market share and the need for more energy system services provided by wind energy. Increased recognition of the diversity of policy needs, tailored to the conditions of each respective jurisdiction, is another significant aspect of this new paradigm. This evolving perspective has come about as onshore wind energy has become the most competitive technology for new energy production in many countries, reducing the need for direct financial support. Accordingly, while the need for wind energy policy support continues, it is becoming increasingly nuanced and focused on serving an array of social objectives associated with the broader evolution of the energy sector. In the future, successful wind energy policies will increasingly be related to creating enabling environments and adapting frameworks, as opposed to focusing on direct investment incentives alone. This reflects a fundamental shift in the perspectives and roles of policy-makers. This is the focus of this chapter, in which we first provide an overview of the state of the art in wind energy policy, followed by upcoming policy challenges and research needs. We conclude with our perspective on the future focus of wind energy policy research.

policy↗