A review by independent consultancy Pöyry AS, entitled ‘Wind Energy and Electricity Prices’, asserts that wind energy reduces electricity prices. The report was conducted on behalf of the European Wind Energy Association (EWEA).
The organization said in a statement:
The report finds that in the studies reviewed by Pöyry, electricity prices were reduced by between €3 and €23/MWh (Megawatt hour) depending on the amount of wind power used.
EWEA chief executive, Christian Kjaer, commented:
It has already been well-established that wind reduces CO2 emissions, but now we have stronger evidence than ever before that wind power also reduces electricity prices for consumers. The message is clear – if you want affordable CO2-free electricity, increase the amount of wind power in your electricity mix.
Pöyry’s work is a comprehensive assessment of studies of the impact of wind energy on electricity prices, which according to EWEA, brings together the findings of case-studies in Germany, Denmark and Belgium for the first time.
The report concludes that the studies essentially draw similar conclusions that an increased penetration of wind power reduces wholesale spot prices. EWEA stated:
Wind power replaces CO2-intensive production technologies, the report finds. The technology that sets the price on the wholesale market is usually hard coal. Wind replaces hard coal power plants during hours of low demand and gas fired power plants during hours of high demand in all the countries the report analyzed.
According to Pöyry, wind power’s impact comes about because its low marginal costs push more expensive technologies, such as gas and thermal plants, out of the market.
Earlier this year, EWEA commented on the growth of the European wind power industry, citing 54% growth in 2009 and projecting a 75% year-on-year market growth of 75% in 2010. According to the EWEA, the UK and Denmark accounted for 44% and 30% of European capacity in 2009, respectively.
EWEA expects a further ten offshore wind farms to add 1,000 MW, representing equivalent YOY market growth of 75%. Last year five countries built new offshore wind farms: UK (284 MW), Denmark (230 MW), Sweden (30 MW), Germany (30 MW) and Norway (2.3 MW).
One of the key expansions in the UK will take the form of a large, government-backed off-shore wind-farm in the Moray Firth, Scotland. In relation to the major development, the UK Crown Estate held the third offshore wind farm leasing round in January.
Among the successful applicants were Sea Energy who received sufficient acreage to develop off-shore wind farms, alongside its joint venture partner Portugal’s EDP Renovaveis S.A. (EDP), with an approximate installed capacity of 1.3 GigaWatts - enough to power 730,000 homes.
The company was also awarded two development sites in the Scottish Round, with partners Scottish & Southern Energy (SSEZY.PK) and RWE’s (RWEOY.PK) Npower unit, with a capacity of 1.8 GW.
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