System costs related to wind power

Balmorel: Power system model | March 2006 - June 2007

In spring 2007, Ea Energy Analyses carried out a number of analyses for the Secretariat of the Danish Economic Council (formerly the Environmental Assessment Institute) quantifying the advantages and drawbacks of expanding wind power production in Denmark.

Four scenarios

In the analyses, we have modelled four future scenarios for Denmark and our neighbouring countries up to 2025 – a market reference scenario and three scenarios with a Danish wind power expansion to 30, 40 and 50 per cent in 2025, respectively. The modelling was carried out using the electricity market model Balmorel. Furthermore, sensitivity analyses with alternative assumptions regarding fuel prices, CO2 quota prices and investment costs of wind power have been made.

The analyses include calculations of costs for infrastructure, environmental gains and economic gains in the electricity market. Macro-economic consequences in other sectors are not included. The analyses are documented in the report “Vindkrafts systemomkostninger” (System costs related to wind power) – available in Danish only.

Socio-economic costs

On the basis of the results of our analyses, the Environmental Assessment Institut has assessed the socio-economic cost of expanding wind power when including distortion losses caused by subsidies to wind power (Danish version only).

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