The Economics of Renewable Energy - Economic Affairs Committee - Contents


Denmark has the highest share of wind-generated electricity in the EU—15.7% of its total consumption in 2006. The country is accordingly held up as an example by some commentators, while others draw attention to features of the company's experience that may not be transferable abroad. Denmark is a relatively small country, with strong transmission links to Germany, Norway and Sweden. The (separate) electricity systems in Eastern and Western Denmark joined the Nordic electricity wholesale market, Nord Pool, in 1999 and 2000 respectively. When the transmission lines are not congested, this market sets a single price for power in Denmark, Finland, Norway and Sweden, ensuring efficient levels of cross-border trade.

The columns in figure below show how the level of generation in Denmark has varied over time. The output of wind generators has increased by a significant amount, whereas the output of coal-fired plants has fluctuated dramatically from year to year. The top line in the figure shows that Danish electricity consumption has grown steadily, and cannot be the cause of the fluctuating output.

The bottom line in the figure shows Denmark's net exports of electricity.[63] There is clearly a strong relationship between net exports and the output of coal-fired generation. The graph does not show this, but those net exports are, in turn, strongly linked to the output of hydro-electric power in Finland, Norway and Sweden. In dry years, with relatively little hydro output, exports from Denmark (and Germany) make up some of the slack.[64] There is little sign of a long-term trend for exports to either increase or decrease over time.

The middle line in the figure shows Denmark's emissions of carbon dioxide from electricity generation. These emissions are clearly linked to the amount of coal- (and oil) fired generation. In other words, Denmark emits more carbon dioxide in years when dry conditions in Scandinavia mean that Danish generators are able to send more power northwards. They do so by increasing the output of coal-fired power stations.

Since Denmark's total output of electricity does not depend solely on conditions within the country, the country's movement towards a lower-carbon energy system is better measured by emissions of carbon dioxide per kWh generated than by total emissions. Carbon dioxide emissions per kWh of electricity generated were 24% lower in 2006 than in 1995.[65]

Electricity in Denmark

The Danish wind industry does gain significantly from the country's strong interconnections to its neighbours. On an hour-to-hour basis, there is a clear tendency for Denmark to export power when the wind is high, and to import power when it has little wind generation. Without the ability to exchange power with its neighbours, Denmark would find it more difficult to integrate its wind generators—we have not attempted to assess how difficult. However, the exchanges within a year tend to balance themselves out—over a year as a whole, we found no evidence of a correlation between Denmark's net exports and its output from wind generation.

63   The vertical axis starts at zero, although net exports can be negative, because in the two years in which Denmark was a net importer of electricity, the amounts involved were small (665 GWh in 2000 and 1,369 GWh in 2005). Back

64   The correlation coefficient between Denmark's net exports and hydro generation in the other three countries is -0.75, showing a strong inverse relationship, while the correlation between Danish net exports and coal-fired generation is even stronger, at 0.89. Back

65   The 2006 figure did represent a slight increase on 2005, but this was because the increase in net exports led to an increase in the level of coal-fired generation, and the average emissions rose accordingly. Back

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