IDEAS home Printed from https://ideas.repec.org/p/ags/feemcl/197399.html
   My bibliography  Save this paper

Carbon Price and Wind Power Support in Denmark

Author

Listed:
  • Gavard, Claire

Abstract

This paper aims at characterizing the conditions of wind power deployment in order to infer a carbon price level that would provide wind power with comparable advantage over fossil fuel technologies as effective wind support policies. The analysis is conducted on Danish data from 2000 to 2010, i.e. after market liberalization took place in 2000. Probit technique is used to analyze the connection of new turbines to the grid each month and tobit analysis is employed on the additional capacity installed monthly. I find that the level and type of the support policy are the dominant drivers of deployment. Electricity price impact is not visible. The investment cost impact is not significant either, but the effect of the interest rate, although not visible in the probit analysis, is significant in the tobit analysis. The number of turbines already installed, that is taken as a proxy for the sites availability, does not have any significant effect either. A feed-in tariff significantly brings more wind power in than a premium policy. The fact that the support policy is a feed-in tariff rather than a premium increases the additional capacity installed monthly by up to several tens MW. The additional capacity installed monthly increases by up to thousand kW for each additional e/MWh of support. If the policy is a premium, I find that 24 e/MWh of support in addition to electricity price is needed to observe the connection of new turbines to the grid with a 0.5 probability. I convert this support level into a carbon price of 28 e/ton if wind power competes with coal, and 50 e/t if it competes with gas.

Suggested Citation

  • Gavard, Claire, 2015. "Carbon Price and Wind Power Support in Denmark," Climate Change and Sustainable Development 197399, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcl:197399
    DOI: 10.22004/ag.econ.197399
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/197399/files/NDL2015-004.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.197399?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:feemcl:197399. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/feemmit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.