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Market based integration of windpower

Hans Erik Kristoffersen

Energinet.dk

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Capacity expansion – 4.600 MW offshore

Potential expansion by the Danish Energy Agency – 2008

Capacity

MW

Anholt 2 x 200

Horns Rev 5 x 200

Læsø 3 x 200

Jammerbugt 4 x 200

0

500

1000

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4500

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MW

Offshore

Onshore

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Example on balance with an additional2500 MW off shore wind and 1000 MW on shore wind

Present 2025

Windpower Min. Production Consumption ConsumptionMin. Production Windpower

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Wind power and the spot-price

Wind powr forecast and spot price Western Denmark January 2009

0

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1

MW

h/h

ou

r

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DK

K/M

Wh

Wind power forecast Spot price Western Denmark

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Curtailment of sales bids

Scarcity of transmissions capacity and consumption in a few hours during the year results in curtailment of sales bids. Current market rules makes market clearing impossible during these hours

With the current price floor producers do not react to the real price of electricity

Wind power only makes up half of the average production in hours with curtailment in Western Denmark

-> There is a need for increased flexibility in thermal power production

Negative spot-prices will introduce a market based solution for hours without market clearing today

Number of hours with curtailment

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urs Western Denmark

Eastern Denmark

Average power production in hours with curtailment 2008

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Western Denmark Eastern Denmark

MW

h/h Wind Power

Small scale CHP

Central Power Plants

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Subsidies for wind power in Denmark

Offshore wind farms- Tender process.

- Fixed Payment = Market Price + Subsidy.

- Payment for 20 TWh or 20 years

- Negative prices at Nord Pool Spot => No subsidies for offshore wind power when prices becomes negative (max 300 hours).

Time

€ cent/kWh

Time

€ cent/kWh

Onshore wind farms- Payment = Market Price + Price premium

- Price premium: DKK 0,25 per kWh for 22.000 full load hours + 0,023 DKK for balancing costs

- May also choose a decommissioning certificates of either DKK 0,12 or 0,08 DKK per kWh.

Biogas and biomass- Payment = Market Price + Price premium

- Price premium: DKK 0,745 per kWh for biogas and DKK 0,015 per kWh for biomass per kWh.

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Thank you for your attentionThank you for your attention