Storing Wind for a Rainy Day: What Kind of Electricity Does Denmark Export?
AbstractOn windy days, Denmark tends to export electricity to its neighbours, and to import power on calm days. Storing electricity in this way thus allows the country to deal with the intermittency of wind generation. We show that this kind of behaviour is theoretically optimal when a region with wind and thermal generation can trade with one based on hydro power. However, annual trends in Denmark's trade follow its output of thermal generation, Nordic production of hydro power, and the amount of water available to Scandinavian generators, not wind generation. We estimate the cost of volatility in Denmark's wind output to equal between 4% and 8% of its market value.
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Bibliographic InfoPaper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 10-19.
Length: 32 pages
Date of creation: Jul 2010
Date of revision:
Electricity; Wind generation; Hydro generation; storage; international trade;
Other versions of this item:
- Richard Green and Nicholas Vasilakos, 2012. "Storing Wind for a Rainy Day: What Kind of Electricity Does Denmark Export?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-31 (All new papers)
- NEP-ENE-2010-07-31 (Energy Economics)
- NEP-INT-2010-07-31 (International Trade)
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- Green, Richard & Hu, Helen & Vasilakos, Nicholas, 2011. "Turning the wind into hydrogen: The long-run impact on electricity prices and generating capacity," Energy Policy, Elsevier, vol. 39(7), pages 3992-3998, July.
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"The Economics of Offshire Wind,"
10-20, Department of Economics, University of Birmingham.
- Hirth, Lion, 2013.
"The market value of variable renewables,"
Elsevier, vol. 38(C), pages 218-236.
- Zafirakis, Dimitrios & Chalvatzis, Konstantinos J. & Baiocchi, Giovanni & Daskalakis, George, 2013. "Modeling of financial incentives for investments in energy storage systems that promote the large-scale integration of wind energy," Applied Energy, Elsevier, vol. 105(C), pages 138-154.
- Mauritzen, Johannes, 2012. "Dead Battery? Wind Power, the Spot Market, and Hydro Power Interaction in the Nordic Electricity Market," Working Paper Series 908, Research Institute of Industrial Economics.
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