16. maj 2009:
Wind Power and Spot Prices
In Great Britain it has been a widely accepted assumption that the high Danish share of wind energy could easily be replicated by other countries.

In order to examine this assumption the Renewable Energy Foundation in November 2008 asked me to analyse the impact of wind power on the spot market in Denmark.

Data for the years 2006 to 2008 were downloaded from Energinet.dk's web site. When a significant interaction with the German market was observed additional wind power data from the German E.ON Netz control area were downloaded as well.

The analyses did not show any convincing correlation between wind power and spot prices, but the following observations deserve attention:

  • The Danish spot market for electricity has on the whole performed satisfactory.
  • However several cases with zero prices and price spikes were observed. Extreme spot prices indicate poor market service. Nearly all cases were related to temporary reductions of the transfer capability of interconnectors preventing the system absorbing wind power variations.
  • The correlation between spot prices in Denmark and Germany is surprisingly high. Even wind power variations are highly correlated between the two countries. Denmark and Germany seem to behave like one electricity market.

Therefore it is more reasonable to say that Denmark and Germany together have integrated 7% wind energy than to emphasize Denmark's 20%.

The observations underline the significance of sufficient capacity and high availability of interconnections.

Extended wind power capacity will put pressure on the spot market. Therefore it is important henceforward to monitor the quality of the market service and to implement the measures considered to be required for maintaining an efficient market service and a secure supply of electricity.

Read summary

See presentation (1,2 MB)

Link to press releases from Renewable Energy Foundation

Link to publications from Renewable Energy Foundation

See paper for Nordic Wind Power Conference 2009

Opdateret d. 27.4.2011