Danish Electricity Exports worth just € 31 million last year

Wind energy could contribute an additional €5 billion per year to gross domestic product (GDP) in the next decade if Ireland exports renewable power, according to a new report. 

The report by global engineering firm Pöyry Management Consulting was compiled for the Irish Wind Energy Association (IWEA), the national association for the wind industry. The findings were presented at an IWEA conference in Dublin yesterday - Irish Times, March 2014.

The idea seems simple on the face of it - build lots of windfarms in the Irish midlands and export the wind energy to Britain at a large profit. What could go wrong ? Well, for those who don't do their analysis, a lot could go wrong. The main problem is that wind exports are not as valuable a commodity as is often made out (oddly enough by the wind industry).

Let's look at Denmark. As you can see, in 2010, exports were worth € 215 million while in 2015 they were worth just € 31 million. Exports (in GWh) reduced each year, reflecting the fact that wind penetration increased at the same time - hence there was less surplus wind to export. But the wholesale price for exports dropped by two thirds in the same period. This reflects lower wholesale prices around Europe as gas and oil prices fell aswell as the huge surpluses created by the current over capacity.  As a result, more and more subsidies have now become required to keep power stations open and renewable generators viable.

Net export	2010	2011	2012	2013	2014	2015
GWh	4,229	3,224	1,620	2,967	2,661	1,908
millions_€	215.766	155.297	50.097	88.965	61.969	31.679
€/MWh	51.02	48.17	30.93	29.99	23.29	16.60

Denmark: total export for all hours with net export. Other hours had a net import (PF Bach).

 € 31 million is only about 0.015% of the wholesale electricity market in Ireland. An amount that is hardly worth building a new industry around here in Ireland and certainly very far from the € 5 billion alluded to above.

Homer Simpson on Danish Wind Power

I have to admit, Homer Simpson was ahead of the game when it came to spotting the myths of Danish wind power...

The Myth of Denmark as a self sufficient renewables success

“When you see the wind blowing in your neighbourhood and the turbines moving, you know that you are making money, which is great incentive to support wind power,” Mortensen observes, adding that polls show around 90 per cent of Danes are in favour of increasing wind energy production.

The outcomes to date are impressive. Denmark is now generating close to 40 per cent of its annual electricity needs from wind and on some days production reaches as high as 120 per cent of needs. An efficient market exchange operates with its neighbours in Germany, Norway and Sweden to take advantage of fluctuating supply and demand, as dictated by weather conditions. - Irish Times, October 2015

Much has been made of Denmark in the Irish media of late and indeed by politicians who are holding it up as an example for Ireland to follow in terms of wind energy.

Unfortunately, much spin comes out of Denmark, which coincidentally sells alot of wind turbines.

Danish Wind Subsidy Scheme Vs Irish Wind Subsidy Scheme -

why the Irish wind industry should be careful for what they wish for

The subsidy scheme for wind is slightly different there :

A price supplement is provided of DKK 0.25/kWh for the sum of electricity generation for6,600 full load hours and for electricity generation of 5.6 MWh per m2 rotor area. The pricesupplement is reduced for each DKK 0.01 the market price of electricity exceeds DKK0.33/kWh nominally, and, thus, the supplement altogether lapses, if the electricity pricereaches a cap of DKK 0.58/kWh or more in current prices 

This works out at a subsidy of €30/ Mwh on top of the market price, but once the market price goes above € 40/MWh there is a reduction in subsidy, with no subsidy at all once the market price hits
€ 80/MWh. Aswell, this subsidy only applies to 6,600 hours of operation i.e. 75% of the year. After this, the wind farm receives the prevailing market price in the region like everyone else. As a result, it is not uncommon for wind farms to shut down once the subsidy runs out as they don't receive enough from the market to cover their costs :

 Now owners of wind turbines complain that spot prices do not even cover maintenance cost - PF Bach, Denmark 2015

Somehow I can't see Ireland adopting the Danish subsidy scheme, yet, Ireland is keen to copy everything else from Denmark in terms of wind integration.

Let's take a look, step by step, at the reality of Denmark's grid operation in 2015:

1. Denmark has 3.5GW of onshore wind, around 1GW more than Ireland. On top of this they have 1.2GW of offshore giving a total of 4.7GW, compared to Ireland's 2.5GW. 
2. Nearly 40% of the electricity mix was from wind in 2014. Strong interconnections was the main factor behind this achievement. However, this figure includes the quite high amounts of wind that is exported so the amount of wind energy actually consumed in Denmark would be less than this figure in reality.
3. Denmark has eight interconnectors compared to Ireland's two.
4. There are many more interconnectors planned in Denmark. It is envisaged that these will make up for the shortfall in dispatchable capacity. Ireland has a surplus of dispatchable capacity. 
5. Denmark is heavily reliant on CHP for dispatchable plant which is declining meaning that Denmark will no longer be self-sufficient in a few years. By 2018, it will be heavily reliant on expensive imports through interconnectors. The reality is that Denmark is far from the "self sufficient renewable success" portrayed by the media here in Ireland. If Denmark had not access to the unique Nordic system, they would have to build more power stations, like the Germans, English and Dutch. 
6. Export to import exchanges can change from 60% export to 75% import in the space of half a day (such as 9th July 2015)
7. It is widely assumed that export prices are practically Zero while import prices are very high. Hence, why exporting wind power does not pay (unless you find a sucker willing to pay the subsidy). 
8. 99% of (their neighbour) Norway's power comes from Hydro. This can be ramped up and down at the touch of a button, without losses in efficiency and therefore is perfect for back up for wind energy. But it is very expensive and as per point 7, the Norwegians regularly fleece the Danes for using it.  Ireland has very little hydro and neither does the UK or France. Gas turbines, by contrast, are not designed to run on low operation levels during high periods of wind, Nuclear plant are designed to run at baseload i.e. constant output. So the Danes are in a unique position viz a viz their wind generation and access to substantial amounts of hydro power. Ireland is not comparable in any way whatsoever.
9. Denmark has the highest electricity prices in the EU. Not surprising, considering the above.

Hydro dam in Norway

Sources : 

PF Bach http://pfbach.dk/firma_pfb/pfb_wind_power_integration_in_denmark_2015.pdf

Danish Dept of Energy: Outline of the Danish support schemes for electricity generation based
on renewables     http://www.ens.dk/sites/ens.dk/files/undergrund-forsyning/el-naturgas-varmeforsyning/el/elproduktion/stoette-vedvarende-energi/outline_of_dk_support_schemes_update_22_04_13_081113.pdf)

Analysis by Dr Fred Udo challenges accuracy of SEAI report

The reduction of CO2 emissions by Irish wind energy

Last year, SEAI issued a (revised) report on savings in the Irish system due to wind for 2012. I pointed out in a previous post that some of the assumptions they used resulted in greater CO2 savings than would have been the case in reality.

Dr Fred Udo has done an excellent analysis on this report, using more valid assumptions than the ones used in the SEAI report. He concludes that :

1. SEAI admits there is increased fuel use due to the insertion of wind power in the grid.
2. The authors try to minimize the efficiency losses by inflating the use of OCGT in the reference case.
3. The CO2 calculation used in the PLEXOS model (used by both SEAI and Eirgrid) produces too low CO2 intensities, hence even the 30% loss found in the corrected calculation is too low.
4. Corrected for self-energy (the energy required to build a new generation system around wind) we find a loss of 40% (from SEAI's calculated savings) for 15,3% wind penetration.

Dr Udo makes the distinction between a system with lots of hydro, like Denmark, and one without. Hydro is an efficient back up for wind as it can be turned on and off instantly, while gas generation loses its efficiency with increased amounts of intermittent wind. Yet, the Irish government continue to draw comparisons between Ireland and Denmark.

The full report can be read here :

http://www.clepair.net/Udo20150831-e.html

Energy Minister shows he is out of his depth

He said Denmark, which generates 140 per cent of its energy needs through wind energy, had 5,000 turbines, compared with the Republic’s 1,450, despite having half the land mass - Minister For Energy, Alex White, September 2015.

Denmark generated 140% during one night. The following morning they were barely getting any of their energy needs from wind, with Denmark reliant on imports from Norway and Sweden :

Source: PF Bach http://pfbach.dk/firma_pfb/pfb_operations_2015_07_09_en.pdf

The implication given by the Energy Minister was that Denmark is generating 140% of its needs from wind all the time. This is an ignorant view and shows he is way too far out of his depth to be deciding energy policy at this time.

Denmark is also unique in that it can easily import and export to Norway, who have large amounts of the most suitable back-up for wind, namely hydro.

The UK do not want our wind. They have said as much. 

And France will not want our wind either. Nuclear plants cannot be ramped up and down like hydro. So Ireland will have to dump all its excess wind. Ireland does not have access to a Nordic type back up system so why is the Minister making comparisons with Denmark at all ?

Maros Sefcovic, vice president of the European Commission in charge of energy union, also spoke about how the integration of Europe’s energy markets, billed as the biggest transformation since the pooling of coal and steel production in the 1950s, had been accelerated by the West’s increasingly fractious relationship with Russia, which supplies most of continent’s natural gas.

While Germany and Italy are dependent on Russian gas, Ireland get's its gas mostly from Norway and the Netherlands. 

The evidence that Ireland cannot become Denmark

And why Curtailment of Wind Power will become substantial by 2020

We currently have over 2,000MW of wind. Theoretically, we are at the stage where it should be easy to export some of our excess wind energy, which we can't use, to the UK as curtailment levels are still relatively small (in 2013 we curtailed about 3.5% of our wind) and should not pose problems to the UK system which is 11 times greater than ours. When we reach really high levels of wind, we will want to export a lot more surplus wind energy to our neighbours.

When you extract the data from Eirgrid's website (See here) for the year 2014, electricity exports to the UK amounted to just 6.5% of what we imported.  So for every 1MW of electricity that we import, we export just 0.065 of a MW. So what is going on ?

Days like the 23rd February 2015, give us a clue because large levels of wind penetration occurred. Figure 1 shows wind output which remained unusually high throughout the day - between 1,500MW and 1,969MW which is a record for Ireland (A similar analysis was done for 30th March here).

Figure 1: Wind Generation 23/02/15 - output was very high throughout the day

The shortfalls between the blue line and red line gives an indication of the level of wind 
curtailment that occurred.  Demand was about 4,000MW, so if we take 1,700MW of wind 
and 500MW of imported power that gives  us total non-synchronous generation of 2,200 - 
over half of demand. This means Eirgrid had to curtail approx 200MW of wind to keep 
within the 50% non-sync limit. 

So the logical thing to do would be to instead of curtailing this wind, export it through the interconnector 
to the UK. Figure 2 shows that we were actually importing electricity about 70% of the time, and 
close to the maximum permitted by the interconnector which is around 500MW. 

If we assume that average demand was around 4,000MW, then this meant that just circa 1,500MW of 
wind could be accepted by the grid (4,000*50% less 500 for the interconnector) at any one time because
we were importing electricity. 

Figure 2: EW Interconnector Flows 23/02/15 - we were importing close to 500MW of electricity from UK from 8am till 10pm

So the fact is that we are not able to export wind energy except at night. This means that a large proportion of our wind cannot be exported and the situation is exacerbated by the fact that high wind speeds tend to occur during daylight hours (as wind is a function of heat).

 When we get to higher levels of wind at 4,000MW or more, we will be at a stage where wind will sometimes exceed even the daily demand.   Taking into account all the constraints in the system - baseload plant that must be running, 50% limit on wind and interconnection etc - this means substantial amounts of wind will have to be curtailed (i.e wind farms will be shutdown) unless it can be exported - currently this is not the case for around two thirds of each day on average and we have no reason to believe this will change in the future.

This presents a problem for the Irish renewable experts because Denmark is often held up as an example of what Ireland can do. But Denmark has 6GW of interconnectors and can export wind at any time to Sweden and Norway. These countries have a lot of hydro which can be switched on and off at the flick of a switch to facilitate the intermittency of Danish wind. This then, perhaps, gives us a clue as to what is going on in the UK.

The UK has only around 900MW of hydro which is kept running as baseload power regardless of what wind is doing.  Figure 3 shows an example of a day with large levels of wind penetration in the UK system. Like Ireland, it is CCGT (gas plant) which is ramped down to accommodate the wind. The CCGT fleet in figure 3 has very low output which means they are running very inefficiently, like a car running in 1st gear. The UK do not want our wind at this time because, frankly, they do not have space for it. Nuclear must be kept running at baseload level and cannot be ramped down. There is a little more freedom with a coal plant but they too are designed mainly for baseload. An interconnector to France won't alleviate the situation as 80% of their electricity is powered by nuclear which cant be ramped down either.

And I might add that windy days in UK tend to occur at the same time as windy days in Ireland (see previous articles on this blog).

Figure 3: The UK system on a windy day

It will become all too clear in the coming years as to how this situation pans out but the phrase "badly thought out" springs to mind. Denmark, we are not, and can never be.

What this means is that it will be very difficult for us to achieve our renewable targets. The only way the UK will take our wind is if we compensate them for their CCGT running more inefficiently. This might sound like a mad idea (and yes it is) but the regulations already facilitate for such an arrangement - see here, its called negative pricing.

What this means for consumers is higher bills - either more payments to shutdown wind farms or payments to compensate the UK grid to take our wind (negative pricing).

By the looks of it, most likely Ireland will overtake Denmark in one aspect - as the country with the most expensive electricity in Europe by 2020.