A surge in output from Nordic renewable-power may depress electricity prices, forcing Danish fossil-fuel plants to close and making the country reliant on power imports for the first time, according to the Danish Energy Association.
Wind power, hydropower, biomass and nuclear energy projects in Norway, Sweden, Denmark and Finland may boost annual electricity supplies by 56 terawatt-hours, or 15 percent from 2011 levels, by 2020, the lobby group said in a report, received Sept. 28 by e-mail. The study assumes a 38 terawatt-hour increase in demand during the period, turning a 9.6 terawatt- hour annual region-wide deficit into an 8.4 terawatt-hour surplus, according to data from the Nordic energy regulator.
“Regardless of how prices develop for fuels and CO2 emissions permits, owners of Danish coal-fired power stations will have a hard time covering fixed costs,” Peter Meirbom, head of strategic analysis at the association, which represents power producers, traders and grid operators, said by phone today from Frederiksberg, Denmark. “Denmark could face a deficit in peakload power generation capacity of 1.6 gigawatts by 2020.”
Denmark is planning to link its electricity market to other countries as it prepares for the growing role of intermittent renewable sources of power. Danish grid operator Energinet.dk and Dutch counterpart Tennet Holding BV plan to make a final investment decision on a 700-megawatt cable, called Cobra, by December 2014, Poul-Jacob Vilhelmsen, chief project manager at Energinet.dk said today by e-mail from Fredericia, Denmark.
The share of renewable energy sources in Danish power supply is set to rise from 40 percent in 2011 to 69 percent by 2020, Denmark’s Energy Agency said on Sept. 28.
Utilities such as Vattenfall AB and Dong Energy A/S plan to mothball about 1 gigawatt of coal-fired plants in Denmark by the end of the year.
“This is the first stage before real closure, with a likely further loss of 1.5 gigawatts coal-fired capacity as well as 500 megawatts from small gas-fired cogeneration plants by 2020,” Meirbom said.
The loss of coal generation will make Denmark particularly dependent on power imports during peakload periods, such as cold and dark winter afternoons, Meirbom said. To counter that, Denmark needs more cross-border cables, such as the Cobra project, to access continental European markets, he said.
‘The Other Side’
The Dutch grid operator has seemed less keen than its Danish counterpart to implement the cable, illustrating how regulators and grid companies in the EU tend to give priority to national economic interests instead of acting as one, Ulrich Bang, director of EU affairs at the Danish Energy Association said by phone today. The EU is promoting the development of a joint power market in 2014.
“An open question is: what is on the other side of cross- border lines?,” Meirbom said. “Neighbor countries must have a power surplus to serve Denmark when we need it.”
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