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CEP discussion paper
Where does the wind blow? Green preferences and spatial misallocation in renewable energy sector
Yatang Lin
April 2016
Paper No' CEPDP1424:
Full Paper (pdf)

JEL Classification: R12;R38;Q42;Q48

Tags: spatial misallocation; renewable energy policies; productivity; green preferences

Are "greener" investments less efficient? This paper looks at the location choices by wind power investors. I measures the efficiency loss in this sector due to wrong project location and explore the factors contributing to it. Using extensive information on wind resources, transmission, electricity price and other restrictions that might affect the siting of wind farms, I calculate the predicted profitability of wind power projects for all the possible places across the contiguous US, use it as a counterfactual for profit-maximizing wind power investment and compare it to the actual placement of wind farms.