Calm before the storm: Market prices in a power market with an increasing share of wind power

Abstract

Western Denmark is a separate bidding area in the North-Western European power market, Nord Pool. Wind power now exceeds 50% of production annually in Western Denmark. Hourly market data from 1999 onwards are publicly available from the Danish TSO. In this paper, we analyse these data for 2009–2021. Until the energy crisis began in 2021, the Nordic power market has shown relatively stable prices. While extreme events are moderately increasing, the value factor of wind is stable. Thus, the current infrastructure – flexible power plants, interconnectors and electrification of district heating – and market organisation can manage the amount of wind power installed. In other words: 2009–2021 show a well-functioning market economy of dispatch, operating on top of a planned economy of investment.