Wind energy production depends on the changing weather conditions. As all wind turbines produce during windy periods, wind energy tends to earn lower market prices than the average producer— commonly measured as the Value Factor (VF). During the last ten years, the share of electricity covered by wind has increased from about 40% to 60% in western Denmark. How has the increased share of wind affected the electricity market?

Grohnheit and Sneum (2023) analyse hourly market data from 2009 to 2021 from the Danish TSO, Energinet. They find that the VF has remained in the 80-90% range in Western Denmark during the last ten years despite the increase in wind share. The authors attribute this to a well-functioning and flexible electricity market. On the production side, the energy system has expanded its interconnection to neighbouring countries and trended towards lower specific-power turbines that produce more during lower wind speeds. On the demand side, district heating has been electrified, which correlates well with higher energy production in the winter months. Overall, Grohnheit and Sneum (2023) acknowledge a successful combination of market- and planned economy in Western Denmark.

Grohnheit, Poul Erik, and Daniel Møller Sneum. 2023. “Calm Before the Storm: Market Prices in a Power Market with an Increasing Share of Wind Power.” Energy Policy 179 (August): 113631. https://www.sciencedirect.com/science/article/pii/S0301421523002161?via%3Dihub