Accurate Weather Forecasts Are the Key to Cheaper Green Energy

More green electricity in the grid and fewer thermal power plants have caused balancing costs to skyrocket. The innovation project Weather2X is doing something about it.

DKK 2.4 billion.

That’s what it now costs, according to Energinet, to balance the Danish electricity grid and ensure the lights stay on when Danes flip the switch.

This is three times more than the DKK 800 million it cost just a few years ago. And with an ever-growing share of solar and wind power in the grid, there’s no sign of prices reversing - because the fluctuating nature of green electricity makes it harder to balance production and consumption.

The bill is passed on by electricity providers to consumers and producers, many of whom are now opening their electricity bills with increasing concern.

“Energinet has changed the way they settle imbalances, which has caused costs to skyrocket,” says Jan Hvidberg, Senior Lead Analyst at Ørsted:

“We’re entering a reality with significant swings in imbalance costs, and our risk as a balance-responsible party has increased dramatically. We can either pass that risk onto our customers - leading to more expensive renewable energy - or we can improve our forecasts to reduce both costs and risks. And that’s exactly what Irene and the Weather2X project are helping us with,” he says.

Absolutely Good News!

“Irene” refers to Irene Livia Kruse, Research Scientist at the Danish Meteorological Institute (DMI). In the innovation project Weather2X, she collaborates with Ørsted and Enfor to develop improved forecasts for solar radiation - allowing more accurate predictions of electricity output from solar panels. The project is supported by the Energy Technology Development and Demonstration Program (EUDP).

Instead of weather models that update every six hours, Irene Livia Kruse can now update forecasts every 15 minutes - and that makes a real difference:

“If a cloud passes over a solar park on Samsø, it affects electricity production. That requires adjustments to the grid,” she explains:

“For producers, it matters a great deal whether they have to operate on a six-hour-old forecast—or whether they can adjust their strategy every 15 minutes.”

As the balance-responsible party for 80,000 solar installations, Ørsted is very aware of the impact. Currently, they receive production data with a one-week delay.

“The technology Irene has developed lets us respond every 15 minutes. That’s a huge difference - for both our risk exposure and our bottom line,” says Jan Hvidberg, calling the improved forecasts “absolutely good news”:

“I’d rather have it half-implemented today than wait for a perfect solution tomorrow. It’s that important—it already creates massive value,” he says.

“We’re working closely with DMI and Enfor in Weather2X and pushing to get it deployed. These forecasts will have an immediate impact on our operating costs from day one, so I hope we’ll see it implemented and in active use very soon.”

"Renewable Energy Is Weather – So You Can’t Overstate the Importance of Forecast Accuracy"

Weather forecasts are a major part of Danish life. A regular segment in the news, a safe go-to topic in small talk—even the color of the weather map can spark political debate.

But we could be getting much more out of weather forecasts than we currently are, says Mikkel Westenholz, CEO of energy forecasting company Enfor:

“In their current form, Danish weather forecasts are mainly meant to remind people to bring a raincoat or tell the road crews when to salt the roads. But precise knowledge of upcoming weather has far more valuable applications than that,” he says.

Mikkel Westenholz believes accurate weather forecasts hold immense value—especially as we transition to weather-dependent renewable energy.

“We are in the midst of a radical transformation of our society, where renewable energy must be integrated as much as possible. Renewable energy is weather. That’s why the importance of accurate forecasts cannot be overstated,” he emphasizes.

Enfor translates weather knowledge into energy forecasts and, as a partner in Weather2X, acts as a bridge between DMI and Ørsted. The project has already produced impressive results - with more to come.

“For both producers and utilities, ongoing improvement in forecast precision is essential. It’s about calibrating on the minute scale - the very short term - and reducing forecast errors. Both will make renewable energy more valuable and accelerate the green transition,” says Mikkel Westenholz.

news-letter-logo

Sign up to our newsletter