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Comparisons with Onshore Wind Power Industry in Denmark

 

What comparisons can be drawn from the development of the Danish on-shore wind industry from the 1970’s?

    • UK & Scotland is in a similar situation to Denmark in the 1970’s
    • Scotland is ideally placed to mimic the Dane’s success story
    • Many of the World’s leading academics and experts in wave and tidal energy are in resident in the UK
    • Aside from the energy issue there is a considerable potential to export technology worldwide and become a World leader in MCT’s
    • Benefits to export economy and skilled jobs market

 

In depth Analysis

 

Evolution of Danish Wind Power Industry

 

Workforce in 1981 was only a few hundred

    • Now total employment has expanded to 20,000

Note

Calculation methods in WindPowerNote No. 2, November 1995.

 

Employment figures are mid-year figures.

Source: http://www.windpower.org/en/stats/totalemployment.htm

 

Industry now has turnover of DKK 20 billion (1.5 million Euros)

Source: http://www.windpower.org/en/stats/turnover.htm

 

  • Export of technology
    • Around 50% of installed wind capacity is Danish in origin
  • 4 major turbine manufacturers:
    • Vestas
    • NEG Micon
    • Bonus
    • Nordex (no longer manufacture turbines)
  • Numerous smaller component manufacturers

Why the success story?

  • By accident?
    • NO!
  • As a result of concerted effort by Danish government to promote the industry?
    • Almost certainly!

 

Danish Government Commitments

 

  • Refusal to adopt nuclear power
  • Halt to proposed new coal fired plants
  • Grants for R&D
  • Tariffs & incentives
  • Offshore plans
    • Higher wind velocities leading to greater energy yields (cubic relationship)
    • Potential to produce 50% of Denmark’s electrical demand (1/4 of total energy demand)
  • Grid priority to renewable-generated electricity
  • Historical Commitment to expanding Wind Power Industry by Policy and continual and consistent adoption by successive governments
  • 1970’s
    • Mandatory purchase of electricity from private wind companies at 85% retail price
  • 1979-1989
    • Capital Grants programme
    • “10% from wind” target set in mid 80’s
    • Target met and exceeded by 2000
  • 1996
    • Energy 21, target of 45% from wind by 2030
    • Will entail additional 5,500 MW installed capacity
    • Likely to be met by offshore developments
  • 2003
    • Improvement of subsidies and inclusion of earlier projects in new subsidy schemes to safeguard investments

 

Lessons from Danish Experience

 

  • Government must provide incentive to investors by:
    • removing uncertainty and unnecessary risk
    • Pledging long term tariffs and grants
    • Increase value of capital grants for marine renewables projects
    • Manage the £50 million “R&D to pre-commercial” fund diligently
    • Promoting Connection of renewables to grid
    • Resolving electricity market trading barriers
    • Be technology/ source specific with ROC/ROS
    • Otherwise utility companies will opt for cheapest form of renewable generation (e.g biomass, on-shore wind, hydro etc.)

 

 

Implementing Danish Lessons into a UK context

 

  • Look at progression of UK on-shore wind industry
    • Will marine renewables take a similar path?
    • OR will it be more closely aligned with offshore wind or indeed offshore industry in general?

 

  • What are the similarities and differences?
    • Safety issues
    • Installation costs- moorings, seabed assessment etc.
    • Planning permission
    • Grid connection
    • More costly by a factor of 1 magnitude compared with on-shore wind
    • Leading to increased capital costs from outset
    • Different funding strategy required

 

  • Economies of scale
    • Larger scale farms will lead to reduced costs
    • Even if government fails to attract backing from a moral “carbon-reducing” perspective, one cannot ignore the huge potential for economic growth existing in marine renewables

 

  • Government has 2 options:
    • “import” clean energy technologies
    • Effectively allowing other countries to invest and carry out the work
    • Or develop World’s leading marine renewables industry in the UK

 

  • The later option would:
    • Enable UK to reap the combined benefits of economic growth and diversity
    • In addition to meeting the environmental and carbon sequestration challenge, so clearly sighted by the government as a target for 2020 and beyond