Trading wind in a hydro-dominated power pool system

In 1996, the Danish government launched an ambitious energy plan, Energy 21, describing a way to develop the energy sector in a more sustainable direction. Wind power plays an important role in the plan, and as a consequence there will be a very high penetration of wind energy in the electricity sector. This will put in focus issues of fitting a variable energy source into a stable supply system. The present study investigates the role that collaboration with the hydro-based Scandinavian countries can offer, and particularly looks at the conditions of the Nordic power pool, asking whether it will be possible profitably to trade wind power in such a pool system. The result is that wind power can indeed be integrated into the system as planned in Energy 21, with a supply security as high as currently, and with average trading costs constituting 11% of the average price obtained by selling wind power to the pool.