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Wind turbines are capital intensive and the entire cost is upfront. Once the turbine is built it makes sense to sell it at whatever the current market rate is.
by 7952 4y ago
Wind turbines are capital intensive and the entire cost is upfront. Once the turbine is built it makes sense to sell it at whatever the current market rate is. That could be really low or really high. The main purpose of government support is to give some certainty about being able to pay off the debt. But that support has become less neccesary as costs go down and wholesale prices go up. Arguably the main benefit of setting prices upfront in the long term is avoiding price spikes and encouraging cost reduction. But there are also risks in terms of the cost of servicing debt as interest rates rise.