The Danish Wind Experience: Truth and Fiction
Posted September 14, 2009
This CEPOS study by Hugh Sharman about the Danish wind experience has begun to receive a great deal of attention. The study provides a great account of how the Nordic grid has been effectively used to manage the fluctuations from wind power on the system and points to the crucial role of grid infrastructure for integrating wind. Unfortunately the central message of the study has been hijacked, and its central points heavily distorted. Instead of dwelling on IER's misrepresentations, let me elaborate on what the study does say:
On the emissions benefits of wind
The author points out that because of the cost dynamics on the Danish grid and the way coal power is used, wind doesn’t reduce the emissions on that system. However this is simply an artifact of the how the Danish market is structured and how their power system is managed. It bears no relationship with how the US grid is governed or operated. In fact, given the heavy use of coal and natural gas in the US grid, the addition of wind to the US grid to displace conventional generation has the potential to greatly reduce greenhouse gas emissions.
On the Cost of Danish Power
The cost of electricity in Denmark is high, but this is a result of tax policy, not wind. According to Eurostat, the European Union’s official statistics agency, the pre-tax price of electricity for an average medium household in Denmark is 120€ per MWh, which is virtually equivalent to the European average of 119€ per MWh. The pre-tax price of electricity in Denmark is actually 23 percent lower than Ireland as well as significantly lower than the United Kingdom (by 14 percent) and Germany (by 7 percent). After taxes are taken into account, the price comparison is slightly different: the electricity tax in Denmark means the net price of electricity is higher than the European average. But as the CEPOS study points out, this is a function of Danish policies, not a result of wind deployment.
On 20% Wind and the Implications for the US
Denmark is a small country with a population is less than that of Maryland but yet it has been able to develop a great deal of wind power. The reason is that Denmark has a very strong connection with neighboring grids and can use Norway and Sweden’s hydropower to balance the fluctuations that wind imposes on the system. In the words of the study's author:
It was a lucky coincidence that although Denmark has no electricity storage within its electricity system, it has, for many years and for reasons having nothing to do with balancing wind power, been strongly inter-connected with its neighbours, Germany, Norway and Sweden. These have much larger power systems. To the north, the largely hydroelectric systems of Norway (99% hydro) and Sweden (40% hydro) are able to balance the stochastic variations in Denmark’s wind power by continuously turning their hydropower systems up and down. When “excess” windpower electricity flows along the inter-connector into Norway (for example), hydropower can be rapidly turned down to match, effectively “storing” Danish wind power in Norway. As the wind energy falls or ceases, the “stored” electricity can be released very efficiently to make up any shortfall in West Denmark. The electricity trading market responds to fluctuations in the spot price (i.e. instantaneous commercial value) of power. In this way, Denmark’s two closest two Nordic neighbours effectively act as Denmark’s “electricity storage batteries”.
The message is abundantly clear: a strong grid and responsive power plants (such as Norway and Sweden’s hydroelectric fleet) make integrating wind much easier. In fact Denmark's total wind generation is almost 20% of the nation's total elecricity consumption. It is true that not all of Denmark's of windpower is used inside its borders, but that only speaks to the importance of integrating wind over a large area and the use of a strong grid to balance out fluctuations from variable renewables. While individual US states may get an a large fraction of their power from wind and solar, it certainly doesn't make sense to force all of that power to stay inside their borders. The use of robust connections with neighboring regions allow excess wind to be transported outside the wind producing region during times of high wind output and likewise wind lulls can be compensated with increased output from dispatchable renewables (in this case hydro):
H. Sharman “Wind Energy: The Case o Denmark” CEPOS 2009
As the author seems to imply above (and as I recently mentioned on this blog) another strategy for integrating wind is to use energy storage. However these are only a few of the many tools available for integrating wind on the system. Two other critical tool include demand side management enabled through grid communication infrastructure (i.e. the “Smart Grid”) and use of advanced wind forecasting tools.
Regardless of what means are used to integrate wind, it is important to keep in mind that the cost of inegrating wind is only about 10% of the whoesale cost of wind energy (see balancing costs below) and places that have very little wind power (like most of the US) can integrate wind at even lower cost. In fact, where there is spare natural gas capacity on the system, that cost can be minimal.
H. Holttinen, et al, "Design and operation of power systems with large amounts of wind power: State-of-the-art report " VTT Technical Research Centre of Finland, Vuorimiehentie, Finland VTT–WORK–82, October 2007.
The US gets about 2% of electricity from wind which means variability is not a fundamental barrier in the near term. However, grid access (or lack thereof) is quickly becoming a barrier to wind development in the US and it is clear that we will needs to move forward on well-sited transmission lines that will help facilitate the continued growth of wind.
This recent Danish study provides a valuable data point on how grids can be managed to accommodate high penetrations of renewables. The lessons learned are not directly transferrable and integration solutions will vary by region, but is clear that a strong grid will play an important role in the large scale deployment of variable renewables. Regardless of how we get there, wind is a critical large-scale, low-carbon energy resource and an important means toward achieving a clean energy future.
Thanks to David Cohen-Tanugi for help in preparing this post