The focus of this report is to explore the impacts of deploying a large share of wind energy on the Northwest European power generation mix in the current market circumstances. The conclusion of the study is provided below. The full document can be accessed by clicking on the link(s) below.
Wind power has a low capacity credit (in NW Europe). This means that wind power does not
significantly replace other generating capacity; alternative power sources need to be in place,
together with new installed wind capacity for at least 80% of installed wind capacity, to ensure
that there is sufficient back-up to meet market demand at times of reduced wind power supply.
Most of this will have to come from conventional power plants. If hydro capacity from Norway is
available, this back-up capacity could be reduced to approximately 70%. Wind capacity will thus essentially be "surplus" to the necessary dispatchable system capacity,
and thus costs of wind capacity will essentially come on top of the costs of the base conventional
capacity. The extra costs of wind capacity can be reduced or compensated by the abated fuel and
carbon costs from conventional generation.
The effectiveness of wind power to reduce CO2 emissions is directly related to the level of CO2
prices. In today's energy market with low CO2 prices, new installed wind power tends primarily to
replace gas-fired power, resulting in limited CO2 reduction, and thus becomes an expensive and
less effective way of reducing CO2 emissions.
Sufficiently high CO2 prices would reverse the position of gas and coal in the merit order
(irrespective of wind), reducing CO2 emissions by around 10-25 %. Other or complementary ways
to achieve CO2 emission reduction (for example, the use of an Emission Performance Standard)
were not analysed in this paper.
With higher CO2 prices, wind would replace coal-fired power, further reducing CO2 emissions and
significantly improving the effectiveness and costs of wind in reducing CO2 emissions.
In a conceptual design for a future low-carbon energy system in which wind plays a prominent
role in reducing CO2 emissions, gas-fired power is the most suitable and economic partner, as
long as other renewable options remain unproven, technically limited and/or uneconomical.
A high CO2 price would be a tool for forcing additional low carbon measures, such as CCS. With
CCS, gas fired generation remains more competitive than coal with CCS and offers an attractive
and competitive low CO2 option, in its own right, as well as in combination with wind.
An additional question which arises is whether the present market model for organising and
dispatching electricity is appropriate and effective in an environment with a significant share of
wind power. In this context there are implications of large-scale partnering with wind power for
the performance and economic viability of gas-fired power plants (with or without CCS) as well as
for the gas supply. These will need to be further examined to ensure that the gas and power
industries are ready to become secure partners.