Wind brings down the price of energy

A review by independent consultancy Pöyry AS, entitled ‘Wind Energy and Electricity Prices’, asserts that wind energy reduces electricity prices. The report was conducted on behalf of the European Wind Energy Association (EWEA). “The report finds that in the studies reviewed by Pöyry, electricity prices were reduced by between €3 and €23/MWh (Megawatt hour) depending on the amount of wind power used,” the organisation said in a statement.

“It has already been well-established that wind reduces CO2 emissions”, EWEA chief executive Christian Kjaer commented. “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.”

Pöyry’s work is a comprehensive assessment of studies of the impact of wind energy on electricity prices, which according to EWEA, brings together the findings of case-studies in Germany, Denmark and Belgium for the first time.

The report concludes that the studies essentially draw similar conclusions that an increased penetration of wind power reduces wholesale spot prices, EWEA stated.

“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.”

According to Pöyry, wind power’s impact comes about because its low marginal costs push more expensive technologies, such as gas and thermal plants, out of the market.

Earlier this year, EWEA commented on the growth of the European wind power industry, citing 54% growth in 2009 and projecting a 75% year-on-year market growth of 75% in 2010. According to the EWEA, the UK and Denmark accounted for 44% and 30% of European capacity in 2009, respectively.