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It is well established within both the economics and power system engineering literature that hydro power can act as a complement to large amounts of intermittentenergy. In particular, hydro power can act as a "battery" where large amountsof wind power are installed. This paper attempts to extend that literature bydescribing the effects of cross-border wind and hydro power interaction in a day-ahead "spot" market. I use simple econometric distributed lag models with datafrom the Nordic electricity market and a sample of Norwegian hydro power plantswith water storage magazines. I suggest that wind power mainly affects prices inthe hydro power area by way of shifting the shadow value of water. The empiricalresults support this view

Dead Battery? Wind Power, The Spot Market, and Hydro Power Interaction in the Nordic Electricity Market