Storing Wind for a Rainy Day What kind of electricity does Denmark export?

Richard Green and Nicholas Vasilakos
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Nicholas Vasilakos: Centre for Competition Policy and Norwich Business School, University of East Anglia

No 2011-11, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: Physical laws mean that it is generally impossible to identify which power stations are exporting to another country, but economic logic offers strong clues. 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 and are inversely related to Nordic production of hydro power and the amount of water available to Scandinavian generators, with no correlation with wind generation. We estimate the cost of volatility in Denmark's wind output to equal between 4% and 8% of its market value.

Keywords: Electricity; Wind generation; Hydro generation; storage; international trade (search for similar items in EconPapers)
JEL-codes: D43 L13 L94 Q41 Q42 (search for similar items in EconPapers)
Date: 2011-07-01
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Storing Wind for a Rainy Day: What Kind of Electricity Does Denmark Export? (2012)
Journal Article: Storing Wind for a Rainy Day: What Kind of Electricity Does Denmark Export? (2012)
Working Paper: Storing Wind for a Rainy Day: What Kind of Electricity Does Denmark Export? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2011_11

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