Wind almost free in Denmark

Consumers in Denmark saved between EUR 80 million and EUR 90 million on their electricity bills last year thanks to the downward pressure on spot market prices effected by wind power feeding into the system. The savings were less than the previous year, due to poorer winds in 2006 than in 2005, but the total bill for state subsidies to wind power, which drop as wind turbines get older, were halved last year. The result was a reduction in the net costs of wind generation to consumers, which fell from EUR 0.0015/kWh in 2005 to EUR 0.0005/kWh in 2006.

The savings are documented in the latest analysis by Poul Erik Morthorst, senior researcher at the Danish national laboratory at Risø, of annual price and generation statistics published by transmission system operator Energinet. In Morthorst's first analysis of Energinet statistics, for 2004, wind power saved consumers between EUR 35-38 million and in 2005 the total sum paid for electricity in Denmark would have been EUR 126-140 million greater if it had not been for wind power. The EUR 80-90 million savings in 2006 result from the production of 5250 turbines (3130 MW) in a year when the wind's energy content was just 85% of that expected in a statistically normal year.

The total bill for wind power in 2006 was less than in 2005. While consumers in 2005 saved EUR 0.0045/kWh from depressed electricity prices on the open market thanks to wind power, subsidies paid for wind production cost them EUR 0.006/kWh, resulting in a net cost for consumers of EUR 0.0015/kWh. In the poor winds of 2006, wind power was only able to knock EUR 0.0025/kWh off the consumer price of electricity, but with fewer wind turbines receiving production subsidies the total wind power subsidy bill to consumers amounted to EUR 0.003/kWh, resulting in a total net cost of EUR 0.0005/kWh paid for wind power, a third of the cost in 2005.

Although wind strengths were 15% below average in 2006, they have been 15% above average during the first nine months of 2007. Morthorst believes the extra wind production will apply even greater downward pressure on market prices over the whole year. But other factors also play a role, he says, and it cannot be concluded that the more the wind blows, the greater the savings for consumers.