Germany’s Wind Energy: The Potential for Fossil Capacity Replacement and Cost Saving

Wind energy has become the major renewable energy source in Germany with an installed capacity of more than 20 GW and an annual output of about 40 TWh in 2007. In this paper we analyze the extent to which wind energy can replace fossil capacities based on wind injection and demand data for 2006 through June 2008. We also assess the potential savings due to wind energy. The German market is modeled with and without wind input to estimate the net savings of fossil fuels in the observation period. Method The objective of this paper is to analyze the available information regarding wind energy output in Germany from 2006 until June2008. Given the hourly wind input data two questions are asked. First, how much fossil capacity can be replaced by the installed wind turbines? Given the high fluctuation in wind speeds, wind capacities are not dispatchable like conventional power plants. However, if a large area is covered by wind parks, differences in local wind availability may partly “flatten ” the fluctuation and therefore decrease the need for fossil backup. The question is answered by analyzing wind and load profiles and assessing the potential for capacity replacement. Second, how much has the injected wind energy saved in terms of fossil fuel costs? On one hand