Warsaw, 21 April 2010

Wind power reduces electricity prices and CO2 emissions, a study published today by the European Wind Energy Association (EWEA) reveals.

The review ‘Wind Energy and Electricity Prices’, a comprehensive assessment of studies of the impact of wind energy on electricity prices, was carried out by the independent consultancy Pöyry AS on behalf of EWEA. It brings together, for the first time, the findings of case studies in Germany, Denmark and Belgium.

The report focuses on the effect of wind energy on the electricity price in the power market. As the report will discuss, adding wind into the power mix has a significant influence on the resulting price of electricity, the so called merit order effect (MOE).

The report finds that in the studies reviewed by Pöyry, electricity prices were reduced by between 3 and 23 EUR/MWh depending on the amount of wind power. It concludes that the studies “essentially draw similar conclusions” and that “an increased penetration of wind power reduces wholesale spot prices.”

“It has already been well-established that wind reduces CO2 emissions,” said Christian Kjaer, EWEA’s Chief Executive. “But now we have stronger evidence than ever before that wind power also reduces electricity prices for consumers. The message is clear – if you want affordable CO2-free electricity, increase the amount of wind power in your electricity mix.”

Wind power replaces CO2 -intensive production technologies, the report finds. The technology that sets the price on the wholesale market is usually hard coal. Wind replaces hard coal power plants during hours of low demand and gas-fired power plants during hours of high demand in all the countries the report analysed.

Wind’s impact comes about because its low marginal costs pushes more expensive technologies, such as gas and thermal plants, out of the market.

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MeritOrder.pdf

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