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Storing Wind for a Rainy Day: What Kind of Electricity Does Denmark Export?

Author Info

Listed author(s):
  • Richard Green
  • Nicholas Vasilakos

Abstract

On 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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File URL: ftp://ftp.bham.ac.uk/pub/RePEc/pdf/10-19.pdf
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Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 10-19.

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Length: 32 pages
Date of creation: Jul 2010
Handle: RePEc:bir:birmec:10-19
Contact details of provider: Postal:
Edgbaston, Birmingham, B15 2TT

Web page: http://www.economics.bham.ac.uk

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Keywords: Electricity; Wind generation; Hydro generation; storage; international trade;

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Find related papers by JEL classification:
  • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - 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

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