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Wind power in the Danish liberalised power market--Policy measures, price impact and investor incentives

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  • Munksgaard, Jesper
  • Morthorst, Poul Erik

Abstract

Wind power has a strong position at the Danish electricity market, mainly caused by high feed-in tariffs in the 1990s. Investments in new wind-power installations on land, however, have declined dramatically after the Danish electricity market was liberalised in 1999. First, the paper describes how policy measures directed towards wind power have been redesigned to match the liberalised market. Then, we estimate the impact of the redesigned tariffs on the electricity prices. Finally, we assess whether the new tariffs make an incentive to invest in wind power. The paper concludes that the new tariffs not by itself make evidence for the actual Danish recession in new wind-power installations after the electricity reform. The main causes could include a combination of problems in spatial planning, high risk aversion of new wind turbine investors and perhaps more favourable support schemes in other countries.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 36 (2008)
Issue (Month): 10 (October)
Pages: 3940-3947

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Handle: RePEc:eee:enepol:v:36:y:2008:i:10:p:3940-3947

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Web page: http://www.elsevier.com/locate/enpol

Related research

Keywords: Wind power Electricity reform Policy measures;

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Cited by:
  1. Minh Y Nguyen & Dinh Hung Nguyen & Yong Tae Yoon, 2012. "A New Battery Energy Storage Charging/Discharging Scheme for Wind Power Producers in Real-Time Markets," Energies, MDPI, Open Access Journal, vol. 5(12), pages 5439-5452, December.
  2. Green, Richard & Vasilakos, Nicholas, 2011. "The economics of offshore wind," Energy Policy, Elsevier, vol. 39(2), pages 496-502, February.
  3. Hirth, Lion, 2013. "The market value of variable renewables," Energy Economics, Elsevier, vol. 38(C), pages 218-236.
  4. Liu, Yingqi & Kokko, Ari, 2010. "Wind power in China: Policy and development challenges," Energy Policy, Elsevier, vol. 38(10), pages 5520-5529, October.
  5. Klinge Jacobsen, Henrik & Zvingilaite, Erika, 2010. "Reducing the market impact of large shares of intermittent energy in Denmark," Energy Policy, Elsevier, vol. 38(7), pages 3403-3413, July.
  6. Markard, Jochen & Petersen, Regula, 2009. "The offshore trend: Structural changes in the wind power sector," Energy Policy, Elsevier, vol. 37(9), pages 3545-3556, September.
  7. Nicolosi, Marco, 2011. "The impact of RES-E policy setting on integration effects - A detailed analysis of capacity expansion and dispatch results," MPRA Paper 31835, University Library of Munich, Germany.
  8. Mauritzen, Johannes, 2011. "The Decision to Scrap a Wind Turbine: Opportunity Cost, Timing and Policy," Discussion Papers 2011/17, Department of Business and Management Science, Norwegian School of Economics.
  9. Klaus Friesenbichler, 2013. "Innovation in the energy sector," WWWforEurope Working Papers series 31, WWWforEurope.
  10. Walters, Ryan & Walsh, Philip R., 2011. "Examining the financial performance of micro-generation wind projects and the subsidy effect of feed-in tariffs for urban locations in the United Kingdom," Energy Policy, Elsevier, vol. 39(9), pages 5167-5181, September.
  11. McConnell, Dylan & Hearps, Patrick & Eales, Dominic & Sandiford, Mike & Dunn, Rebecca & Wright, Matthew & Bateman, Lachlan, 2013. "Retrospective modeling of the merit-order effect on wholesale electricity prices from distributed photovoltaic generation in the Australian National Electricity Market," Energy Policy, Elsevier, vol. 58(C), pages 17-27.
  12. del Río, Pablo & Calvo Silvosa, Anxo & Iglesias Gómez, Guillermo, 2011. "Policies and design elements for the repowering of wind farms: A qualitative analysis of different options," Energy Policy, Elsevier, vol. 39(4), pages 1897-1908, April.
  13. Paul Koutstaal & Michiel Bijlsma & Gijsbert Zwart & X. van Tilburg, 2009. "Market performance and distributional effects on renewable energy markets," CPB Document 190, CPB Netherlands Bureau for Economic Policy Analysis.
  14. Celiktas, Melih Soner & Kocar, Gunnur, 2009. "A quadratic helix approach to evaluate the Turkish renewable energies," Energy Policy, Elsevier, vol. 37(11), pages 4959-4965, November.
  15. Jägemann, Cosima & Hagspiel, Simeon & Lindenberger, Dietmar, 2013. "The Economic Inefficiency of Grid Parity: The Case of German Photovoltaics," EWI Working Papers 2013-19, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
  16. Boccard, Nicolas, 2010. "Economic properties of wind power: A European assessment," Energy Policy, Elsevier, vol. 38(7), pages 3232-3244, July.
  17. Lion Hirth & Falko Ueckerdt, 2012. "Redistribution Effects of Energy and Climate Policy: The Electricity Market," Working Papers 2012.82, Fondazione Eni Enrico Mattei.
  18. Söderholm, Patrik & Pettersson, Maria, 2011. "Offshore wind power policy and planning in Sweden," Energy Policy, Elsevier, vol. 39(2), pages 518-525, February.
  19. Doherty, Ronan & O'Malley, Mark, 2011. "The efficiency of Ireland's Renewable Energy Feed-In Tariff (REFIT) for wind generation," Energy Policy, Elsevier, vol. 39(9), pages 4911-4919, September.
  20. Yang, Jin & Chen, Bin, 2013. "Integrated evaluation of embodied energy, greenhouse gas emission and economic performance of a typical wind farm in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 27(C), pages 559-568.
  21. Hirth, Lion & Ueckerdt, Falko, 2013. "Redistribution effects of energy and climate policy: The electricity market," Energy Policy, Elsevier, vol. 62(C), pages 934-947.

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