Danish Wind Power and Electricity Export in 2007

By Paul Frederik-Bach, ex Director Danish Western Power Grid.

Denmark is considered to be a frontrunner in the use of wind power. In 2007 the generation of wind energy in west Denmark was 5.6 TWh or 26 % of the electricity consumption.

In east Denmark 1.6 TWh wind energy was generated, which is 11 % of the electricity consumption.

The normal interpretation is that 20 % of the electricity demand in Denmark was covered by clean wind energy in 2007. However, some people claim that this is an idealization, and that most of the wind energy was exported at prices much below the real cost of wind energy.

This paper is a presentation of some facts on Danish wind power and electricity export in 2007 extracted from the web site of the Danish Transmission System Operator, Energinet.dk. Some comparisons are made, but the final destination of the wind energy will always be a matter of political interpretation.

1. Wind Power Characteristics
Some wind power characteristics are demonstrated on the graphic presentation of the hourly West Danish wind power generation in January 2007, particular the intermittent and irregular nature.

The wind power profile is completely different from the daily load profile.

When the hourly net export of electricity is shown on the same diagram as the wind power a certain synchronism appears.

The diagram supports the view that a considerable part of the wind energy has been exported for use abroad.

A statistical correlation can be demonstrated, but we must still discuss if there is a real causal connection.

2. International Exchange of Electricity
The electricity exchange with Denmark’s neighboring countries depends on different market arrangements.

Denmark has joined the Nordic power exchange, Nord Pool. Nord Pool Spot is a day-ahead market with gate closure for bidding every day at 12:00. Nord Pool can dispose of all available transfer capability on interconnectors between the Nordic countries for an optimization based on supply and demand bids for the next day. This procedure is called an implicit auction leading to a market coupling between the Nordic countries. The result is an optimal utilization of the interconnectors.

The transfer capability between the Nordic area and Germany is distributed between market players by an explicit auction prior to gate closure of the German and Nordic spot markets. The market players must bid for transfer capability based on their guess on subsequent spot market prices. The procedure can lead to idle interconnectors in case of wrong guessing. An attempt to arrange a market coupling between Nord Pool and Germany was made recently. The arrangement is temporarily suspended because of less satisfactory results.

The Nord Pool spot price reflects the hydrological situation in Norway.

2007 was a wet year compared with 2006. The high water level of the storages in 2007 is reflected in low spot prices.

Regarding hydrology 2008 does not look much different from 2007, but the commissioning of the NorNed interconnector in May 2008 may have influenced the spot market.
The Nord Pool spot price has a strong influence on Danish import and export of electricity. The net export was 6.7 TWh in 2006 and 1.0 TWh in 2007.

Wind power and competitive generation on Danish CHP (combined heat and power) units are leading to a Danish net export of electricity, even when the spot price is low.

Nobody can tell if the export is caused by wind power or by CHP. In 2007 most of the export was recorded during the cold weeks when the CHP units have a high minimum generation. This observation could be an argument for blaming the CHP for the export.

However, there is no doubt that the net export of electricity would be lower without the wind generation.

3. Wind Power and Export in 2007
As an experiment wind power and net export have been compared hour by hour for each of the two Danish power systems in 2007. The smaller of these two numbers is called exported wind energy.

The diagram shows that in west Denmark electricity export (the dark blue curve) was smaller than wind power production for most weeks in 2007. Therefore at least some wind energy (the yellow area) was used locally. On a weekly basis the exported wind energy has been nearly identical with the net export according to this definition. In east Denmark the export exceeded the wind energy for several weeks.

Even with this interpretation more than 50 % of the wind energy has been absorbed within Denmark. The following diagram shows how the calculated export of wind energy was distributed week by week:

The diagram suggests that nearly 100 % of the wind energy was exported during some weeks.
We do not know the price paid for the exported energy, but we can use the local spot price hour by hour as a hypothesis. The table should be seen as an indication. Some surplus electricity was traded in the regulating market and sold at prices below the spot price level.

The table tells that even if we accept that this share of the wind energy was sold abroad, the commercial value was just slightly lower than the spot price. However, the spot price level in 2007 was considerably below the real cost of wind energy. It remains to be seen if the future spot prices will pave the way for a better business case for wind energy.


4. Lessons Learned

There seems to be a conflict between CHP and wind power during cold periods of the year. The conflict was not a serious problem so far. The strong interconnections and the international markets provided the necessary trading opportunities.

The wind power generation in Denmark will be expanded considerably. The target for 2025 is 50 % of the electricity demand. The international trading will probably not be able to absorb the increased share of wind power by 2025. It is also an open question if an acceptable utilization of the new wind power assets can be achieved by export.

Fortunately the CHP systems are not only a source of problems. They can also contribute to a solution. The hot water in the district heating systems is a large thermal storage. The CHP units can be operated in a very flexible way if surplus electricity is used for water heating.

Water heating can be direct or by heat pumps. It can guarantee a proper use of all electricity and a minimum price for surplus electricity. In the present regulating market negative prices frequently occur for downwards regulation.

Paul-Frederik Bach                                                                                               03 December 2008

4 comments on “Danish Wind Power and Electricity Export in 2007

  1. Using Money To Transmit Electricity Through Space And Time

    Whilst at Wessex Water to meet our green power aspirations, we looked at various wind energy schemes as a means of offsetting future power prices rises.

    We found that the best sites were in Scotland but the costs of transmission outweighed any saving in overall power costs.

    Therefore we looked at selling the power in Scotland and using the money to buy power in England and this worked financially.

    The point being we didn’t care where the power came from as long as we were paying less than otherwise and it was of a green origin – we could point to having invested money and caused the creating of green energy, whether or not we could be said to be using it.

    It seems to me that the same argument arises in Denmark’s case – how much is exported and used elsewhere, or indeed re-imported at a later times is irrelevant – Denmark has secured a hedge against future power prices, and can be said to have caused the creation of assets to generate a given amount of green energy – it seems to me totally irrelevant whether or not the stuff gets used in Denmark – ultimately, it will be displacing marginal coal somewhere in Europe.

    Regarding value, it may well be that the exported power does not realize the value the Danes may like – but as Jerome Guillet points out, the existence of wind energy, which has virtually a zero production cost, and therefore takes precedence, has forced the general level of prices down in Denmark.

    See –
    http://tx1.fcomet.com/~claverto/cms/download/181/

  2. There has been an interesting debate at the foot of Paul – Frederik Bachs articl on Danish Windpower, on the Wikipedia, Windpower talk page, with some interesting statistics:
    see:http://en.wikipedia.org/wiki/Talk:Wind_power

    ………………………………………..
    The original author of the two tables has now revised the data and it is published in an article here:

    http://tx1.fcomet.com/~claverto/cms/danish-wind-power-and-electricity-export-in-2007.html Still puzzles me why it is considered so important – take away the boundary of countries, it doesn’t alter how much was generated – and it all goes to reducing coal generation somewhere in Europe. Whether or not any is expoerted, it still contains a useful orientation of the facts to say that “Denmakr generates 20%, (or whatever ) of its annual power consumptionEngineman (talk) 09:21, 8 December 2008 (UTC)

    It’s been stated a number of times why this is important. “Take away the boundary of countries” and Europe as a whole generates a few percentage of its electricity by wind, not 20% as the small component Denmark does. Denmark on its own does not prove that a system as a whole can generate 20% of its electricity from wind, at least not unless 20% of its consumption also comes from wind. Which, according to this article, it doesn’t. TastyCakes (talk) 21:48, 8 December 2008 (UTC)
    As long as we are splitting hairs, we should split them accurately. The appropriate boundary to draw around Denmark’s wind power production would contain only those electricity consumers who consume some of Denmark’s electricity exports. Given that Europe has relatively few long-distance HVDC interties yet, I doubt that much if any electricity from Denmark travels as far as, say, Spain. The losses from AC transmission would be extremely high for such a distance. Most of the trade is probably with Denmark’s neighbors such as Germany, Norway, and Sweden. Those four countries together constitute a much larger control volume than Denmark alone, but only a fraction of Europe. The fraction of electricity from wind is increasing in Denmark’s neighboring countries, making it possible that Denmark already imports some wind-generated electricity (for example, if the wind slows in Denmark but continues to blow in Germany). In any case, the fact that Denmark exports some wind power doesn’t prove that Denmark needs to, it only suggests that Denmark is saving some money by doing so. Unless Denmark’s wind turbines are producing more than 100% of Denmark’s electricity consumption at a given moment, Denmark could consume all of its own wind power if it needed to. And if the wind turbines were producing more than 100% of the Danish spot demand, they could shut down a few turbines in the worst case. Apparently Denmark exports some wind power because the rest of Denmark’s generating stations lack the flexibility to throttle back their output when the wind is up, or because a country like Norway is set up better to buy power on the spot market (because of Norway’s high proportion of hydroelectric plants). –Teratornis (talk) 00:26, 9 December 2008 (UTC)
    It matters because people make arguments along the lines of ‘Denmark relies on wind for 20% of its power with only minor problems, therefore the whole EU/UK/US could do the same.’ But Denmark isn’t a power island. The more accurate argument would be that ‘northern Europe relies on wind for 5% (or whatever) of its power with only minor problems, therefore…’.
    —WWoods (talk) 18:13, 10 December 2008 (UTC)
    But we should state the facts clearly. State how much electricity they consume, how much wind power they generate, and how much wind power they export, if that can be determined.
    Denmark produced 25,800 TJ of wind power and consumed 121,857 TJ of electricity in 2007 http://www.ens.dk/sw16508.asp
    The “tightness” of the Danish grid is needed to trade power between its Nordic neighbors in the north and Germany in the south. Norway, Sweden, and Finland hold more than 120 GWh of pumped hydroelectric capacity that they send through Denmark into Germany and the rest of Europe, so that roughly three times the amount of energy needed in Denmark is passing through its wires on most days. The traded volume of power is truly massive: more than 250 TWh in 2006 (Figure 5). Huge flows of power go from the Nordic countries through Denmark during the day to meet peak demand below in Europe, where spot prices are higher, and then reverse direction during the night as the pumped hydro facilities are recharged. Early in the morning, from midnight to around 1:00 a.m., spot prices for power in Germany and Denmark are often $18.07 per MWh while they are from $36.16 to $42.55 per MWh in Sweden, Finland, and Norway (with an average system price of $37.07 per MWh). From noon to 1:00 p.m., in contrast, they are $127.10 per MWh in Denmark and Germany and only $41.20 to $45.33 per MWh in the Nordic countries (with an average system price of $45.02 per MWh). Thus, Denmark’s neighbors supply significant amounts of regulating power helping balance wind energy at low cost. [2]

  3. Rather than the euphemistic taking away of boundries it is obvious the Denmark because of it’s reliance on wildly fluctuating and very expensive wind power has become dependent on foreign countries for it’s electrical supply. For the inconenience and great cost they are rewarded with unreliability and dependency.

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