Danish Wind Power: Export and Cost

In a normal wind year, Danish wind turbines generate the equivalent of approx. 20 percent of the Danish electricity demand. This paper argues that only approx. 1 percent of the wind power production is exported. The rest is used to meet domestic Danish electricity demands.

The cost of wind power is paid solely by the electricity consumers and the net influence on consumer prices was as low as 1-3 percent on average in the period 2004-2008. In 2008, the net influence even decreased the average consumer price, although only slightly.

In Denmark, 20 percent wind power is integrated by using both local resources and international market mechanisms. This is done in a way which makes it possible for our neighbouring countries to follow a similar path. Moreover, Denmark has a strategy to raise this share to 50 percent and the necessary measures are in the process of being implemented.

Recently, a study made by the Danish think tank CEPOS claimed the opposite, i.e. that most of the Danish wind power has been exported in recent years. However, this claim is based on an incorrect interpretation of statistics and a lack of understanding of how the international electricity markets operate. Consequently, the results of the CEPOS study are in general not correct. Moreover, the CEPOS study claims that using wind turbines in Denmark is a very expensive way of reducing CO2 emissions and that this is the reason for the high energy taxes for private consumers in Denmark. These claims are also misleading. The cost of CO2 reduction by use of wind power in the period 2004-2008 was only 20 EUR/ton. Furthermore, the Danish wind turbines are not paid for by energy taxes.

Danish wind turbines are given a subsidy via the electricity price which is paid by the electricity consumers. In the recent years of 2004-2008, such subsidy has increased consumer prices by 0.54 €¢/kWh on average. On the other hand, however, the same electricity consumers also benefitted from the wind turbines since the wind power decreased the electricity market price on Nord Pool. On average during 2004-2008, such effect decreased the consumer prices by 0.27 €¢/kWh and consequently the net influence during this period increased consumer prices by only 0.27 €¢/kWh equal to only 1-3 percent of the final consumer prices. In 2008, the net influence of wind power actually decreased the consumer price slightly by approx. 0.05 €¢/kWh. Consequently, the influence of Danish wind turbines on the consumer electricity price is negligible.