Today, wind power represents more than 30% of the domestic electricity supply in Denmark. Both national and international plans indicate that the share of wind power will increase further. Ea Energy Analyses has conducted an analysis of the integration of wind power in the energy system for the Danish Wind Turbine Owners’ Association and Vindenergi Danmark.
The analysis shows that the increased wind power in the system will lead to a growing gap between the electricity prices captured by wind power and the average electricity price. The gap represents the system integration costs of wind power in the energy system. However, even when integration costs for wind power are included in the long-term electricity production cost, onshore wind power is the most competitive RE technology from the society’s perspective.
Selected actions to improve the integration of wind power have been analysed, and the results show socio-economic benefits from improving the integration of wind power. Amongst others, increased transmission capacity and increased use of heat pumps for district heating have a positive net socio-economic benefit. Increased use of heat pumps for district heating requires adjusting the existing subsidy, taxes and net tariffs to ensure operating incentives.