Economic viability of transmission capacity expansion at high wind penetrations

With growing wind power penetrations in many countries, grid and system integration becomes more and more important issues. This is particularly the case in countries or regions with good wind resources as well as substantial installed wind power capacity as found in e.g. Northern Europe. At 20% penetration in Western Denmark, the issue is pertinent here in relation to future plans of further expansion which is planned in accordance with the Danish Government’s climate change mitigation initiatives. This paper analyses the potential economic benefit of selling excess electricity production on the Nordic power pool Nord Pool in relation to the added expenses of expanding national and international transmission capacity from Denmark in order to accommodate the added export. This is done through energy systems analyses, transmission grid modelling, analyses or the required transmission grid investments and analyses of the Nord Pool price variations. The analyses are done for varying degrees of wind power penetrations ranging from 20% of the West Danish electricity demand up to 100% of the demand. The analyses demonstrate, that while there is an economic potential for some expansion in some years, in most cases the added investment proves unfeasible and either reduction of the wind turbines production under excess generation situations or other uses is more profitable unless the wind penetration very high