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Denmark

Denmark

Consumer bills drop in Denmark -- Savings from wind power

Savings on consumer electricity bills in Denmark thanks to wind power have now reached over EUR 130 million a year, a sum that Norway and Sweden may also have saved as a result of the downward pressure exerted on electricity market prices by imports of Danish wind. That is the main conclusion of an extensive study of the impact of wind power on Scandinavian power pool prices conducted in Denmark by the universities of Aalborg and Aarhus, Denmark's Technical University, the national laboratory at Risø, the wind industry association and the Danish energy agency.

At a wind seminar in Denmark last month, project leader Svend Enevoldsen hammered home the fact that electricity market prices would be higher without wind power on the system. Exactly how much higher depends on demand, the pattern of consumption in any 24 hour period, hydro reserves in the Norwegian and Swedish reservoirs, production capacity and available transmission. The study authors compared these factors hour for hour with sport price movements on NordPool for electricity in the east and west of Denmark. Results for 2005 reveal that consumers in the west, where most wind plant operate, saved more than EUR 100 million and in the east nearly EUR 270 million.

A large part of the Danish wind production is also exported to the rest of Scandinavia. When wind production and exports are high, consumers in Norway and Sweden get cheaper electricity. "We have not calculated how much the Danish wind turbines have pressed down electricity prices in Norway and Sweden, but it could well be a large saving considering the quantity of electricity, just as if Norway built ten or twelve thousand megawatt of wind power, that could press prices down in Denmark," said Enevoldsen.

Net gains for consumers

The savings of over EUR 130 million are around EUR 60 million less than the total annual sum of the Public Service Obligation (PSO) levy paid by Danish consumers to cover the cost of payments for wind power from turbines young enough to be eligible for subsidies. But for 2006, Enevoldsen expects the savings from reduced market prices to be greater than the PSO levy for wind power.

The tipping of the scales comes from a large number of 600-900 kW wind turbines from the 1990s which celebrate their tenth birthdays this year and get pushed onto the open market where they must sell their output for the going price. In addition, the electricity market price has risen, with the result that the price subsidy paid for power from wind turbines ten to 20 years old in recognition of their environmental benefit is correspondingly reduced.

Enevoldsen also points out that since conventional fossil power plant in Denmark are expensive to start up if there is a sudden need for more electricity, "wind power has become somewhat of a darling to the system operator because it can more easily provide balancing power."

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