Advanced

Wind Power and Electricity Markets - A study of wind power capacity, trade and prices on the Nordic electricity market.

Haulin, Anders LU (2015) NEKH01 20142
Department of Economics
Abstract
Global wind power capacity has greatly increased in the last decades and is in
certain areas constituting a significant share of generating capacity. This thesis
examines wind power production data along with prices and inter-regional trade
volumes on the Nordic electricity market Nord Pool Spot to deduce the effects of
wind power on the grid. The research focused on Denmark, since it gets a very large
fraction of its energy from wind power and keeps excellent energy data available for
research. By computing measures of the state of the energy market and looking
at the developments of these over time as well as their correlation to wind power
capacity, conclusions were drawn on the role of wind power in the electricity market.
It... (More)
Global wind power capacity has greatly increased in the last decades and is in
certain areas constituting a significant share of generating capacity. This thesis
examines wind power production data along with prices and inter-regional trade
volumes on the Nordic electricity market Nord Pool Spot to deduce the effects of
wind power on the grid. The research focused on Denmark, since it gets a very large
fraction of its energy from wind power and keeps excellent energy data available for
research. By computing measures of the state of the energy market and looking
at the developments of these over time as well as their correlation to wind power
capacity, conclusions were drawn on the role of wind power in the electricity market.
It was found that investments in wind power capacity had not experienced decreasing
marginal returns but that wind power had reduced the capacity utilization
of conventional Danish power plants. Wind energy was found to be sold on average
at 10 % lower prices than conventional energy and Danish prices were found to have
increased relative to Norwegian prices, although causation in wind power expansion
could not be proven. Spot price standard deviation did not increase notably during
the time span examined.
As wind power capacity increased, wind power production became an increasingly
accurate predictor of electricity export and Danish trade balance did worsen,
although not in a statistically significant manner. Neither transmission capacity nor
profits made by operators of transmission cables increased during the period.
Subsidies were found have expanded rapidly during the 21st century and were
shown to be good predictors of wind power capacity expansion, with a lag of 1-2
years. Around 20 % of Danish wind power subsidies were exported during the period
studied.
The thesis concludes that the Nordic electricity market has incorporated large
volumes of intermittent power capacity without any radical effects on trade or prices,
plausibly due to large hydro-electric capacity, and with a likely decrease in CO2
emissions. (Less)
Please use this url to cite or link to this publication:
author
Haulin, Anders LU
supervisor
organization
course
NEKH01 20142
year
type
M2 - Bachelor Degree
subject
keywords
Wind Power, Econometrics, Financial Economics, Denmark, Subsidies, Electricity, Energy
language
English
id
5051443
date added to LUP
2015-02-19 14:05:23
date last changed
2015-02-19 14:05:23
@misc{5051443,
  abstract     = {Global wind power capacity has greatly increased in the last decades and is in
certain areas constituting a significant share of generating capacity. This thesis
examines wind power production data along with prices and inter-regional trade
volumes on the Nordic electricity market Nord Pool Spot to deduce the effects of
wind power on the grid. The research focused on Denmark, since it gets a very large
fraction of its energy from wind power and keeps excellent energy data available for
research. By computing measures of the state of the energy market and looking
at the developments of these over time as well as their correlation to wind power
capacity, conclusions were drawn on the role of wind power in the electricity market.
It was found that investments in wind power capacity had not experienced decreasing
marginal returns but that wind power had reduced the capacity utilization
of conventional Danish power plants. Wind energy was found to be sold on average
at 10 % lower prices than conventional energy and Danish prices were found to have
increased relative to Norwegian prices, although causation in wind power expansion
could not be proven. Spot price standard deviation did not increase notably during
the time span examined.
As wind power capacity increased, wind power production became an increasingly
accurate predictor of electricity export and Danish trade balance did worsen,
although not in a statistically significant manner. Neither transmission capacity nor
profits made by operators of transmission cables increased during the period.
Subsidies were found have expanded rapidly during the 21st century and were
shown to be good predictors of wind power capacity expansion, with a lag of 1-2
years. Around 20 % of Danish wind power subsidies were exported during the period
studied.
The thesis concludes that the Nordic electricity market has incorporated large
volumes of intermittent power capacity without any radical effects on trade or prices,
plausibly due to large hydro-electric capacity, and with a likely decrease in CO2
emissions.},
  author       = {Haulin, Anders},
  keyword      = {Wind Power,Econometrics,Financial Economics,Denmark,Subsidies,Electricity,Energy},
  language     = {eng},
  note         = {Student Paper},
  title        = {Wind Power and Electricity Markets - A study of wind power capacity, trade and prices on the Nordic electricity market.},
  year         = {2015},
}