When the Wind Blows Over Europe: A Simulation Analysis and the Impact of Grid Extensions

Given the ambitious, politically-driven wind energy agenda in some U.S. States (e.g., California and Texas) and in Europe (e.g., Germany and Spain), adequate regulatory instruments are needed that provide incentives for additional generation capacity and transmission expansion. This paper analyzes the impact of wind energy extension scenarios in 2020 on the European high voltage grid, using a nodal pricing mechanism and assuming expanded wind generation capacity. Our analysis is based on a DC Load Flow network model that is implemented in GAMS. The results show that the necessary network extensions mostly arise from existing congestion, particularly between countries, and that additional wind capacity can be integrated with relatively little effort. We conclude that the regulatory implications of additional feeding-in of wind energy are less critical than often asserted