Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/109130 
Year of Publication: 
2015
Series/Report no.: 
IFN Working Paper No. 1065
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
Wind power generation of electricity has gained popular support because of its low environmental impact and because of its low costs relative to other renewable energy sources. However, concerns have been raised in the power sector that wind power generation will come with the price of increased damage to other power generators. Wind power generation is naturally volatile which requires other power sources to start up and shut down in accordance with weather conditions, which for instance coal or gas generators are not built to do. The previous literature has used simulations to show that the damage done and the associated costs can be substantial. We use a dataset containing all reported failures in the Scandinavian electricity market Nord Pool and data for Danish wind power generation. The analysis shows at for Denmark the short term costs associated with the volatility of wind power generation are non-significant. Effects are slightly more pronounced for Nord Pool, indicating that the other countries in Nord Pool bear some of the costs for Denmark's high share of wind power use.
Subjects: 
Intermittent electricity production
Cycling costs
Nord Pool
UMMs
Failures
JEL: 
L94
Q40
Document Type: 
Working Paper

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