Dead Battery? Wind Power, the Spot Market, and Hydro Power Interaction in the Nordic Electricity Market
AbstractIt is well established within both the economics and power system engineering literature that hydro power can act as a complement to large amounts of intermittent energy. In particular hydro power can act as a "battery" where large amounts of wind power are installed. In this paper I use simple distributed lag models with data from Denmark and Norway. I find that increased wind power in Denmark causes increased marginal exports to Norway and that this effect is larger during periods of net exports when it is difficult to displace local production. Increased wind power can also be shown to slightly reduce prices in southern Norway in the short run. Finally, I estimate that as much as 40 percent of wind power produced in Denmark is stored in Norwegian hydro power magazines.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 908.
Length: 34 pages
Date of creation: 27 Mar 2012
Date of revision:
Contact details of provider:
Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
Fax: +46 8 665 4599
Web page: http://www.ifn.se/
More information through EDIRC
Wind Power; Hydro Power; Nordic Electricity Market; Empirical;
Find related papers by JEL classification:
- L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
- Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard Green & Nicholas Vasilakos, 2010.
"Storing Wind for a Rainy Day: What Kind of Electricity Does Denmark Export?,"
10-19, Department of Economics, University of Birmingham.
- 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).
- Weigt, Hannes & Hirschhausen, Christian von, 2008. "Price formation and market power in the German wholesale electricity market in 2006," Energy Policy, Elsevier, vol. 36(11), pages 4227-4234, November.
- Mauritzen, Johannes, 2011. "What Happens When it's Windy in Denmark? An Empirical Analysis of Wind Power on Price Variability in the Nordic Electricity Market," Working Paper Series 889, Research Institute of Industrial Economics.
- Försund, Finn & Hjalmarsson, Lennart, 2010. "Renewable Energy Expansion and the Value of Balance Regulation Power," Working Papers in Economics 441, University of Gothenburg, Department of Economics.
- Rafal Weron, 2006. "Modeling and Forecasting Electricity Loads and Prices: A Statistical Approach," HSC Books, Hugo Steinhaus Center, Wroclaw University of Technology, number hsbook0601.
- Benitez, Liliana E. & Benitez, Pablo C. & van Kooten, G. Cornelis, 2008.
"The economics of wind power with energy storage,"
Elsevier, vol. 30(4), pages 1973-1989, July.
- Twomey, Paul & Neuhoff, Karsten, 2010. "Wind power and market power in competitive markets," Energy Policy, Elsevier, vol. 38(7), pages 3198-3210, July.
- Hjalmarsson, Erik, 2000. "Nord Pool: A Power Market Without Market Power," Working Papers in Economics 28, University of Gothenburg, Department of Economics.
- Belanger, Camille & Gagnon, Luc, 2002. "Adding wind energy to hydropower," Energy Policy, Elsevier, vol. 30(14), pages 1279-1284, November.
- Newbery, David, 2010. "Market design for a large share of wind power," Energy Policy, Elsevier, vol. 38(7), pages 3131-3134, July.
- Amundsen, Eirik S. & Bergman, Lars, 2006. "Why has the Nordic electricity market worked so well?," Utilities Policy, Elsevier, vol. 14(3), pages 148-157, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elisabeth Gustafsson).
If references are entirely missing, you can add them using this form.