The interaction between Danish wind power and Norwegian hydro power

It is well established that hydro power can act as a complement to large amounts of intermittent energy. In particular, hydro power can act as a "battery" where large amounts of wind power are installed. This new research paper uses simple distributed lag models with data from Denmark and Norway. Increased wind power in Denmark is found to cause increased marginal exports to Norway. This effect is larger during periods of net exports when it is difficult to displace local production. Increased wind power can also be shown to slightly reduce prices in southern Norway in the short run. Finally, estimates show that as much as 40 percent of wind power produced in Denmark is stored in Norwegian hydro power magazines.