Denmark’s renewable energy journey began with a commitment to wean its economy off oil in the 1970s. That commitment has evolved into a series of what Danes call “Energy Agreements” that represent legislative targets for various sectors of the nation’s energy economy. Here is the Danish Energy Agency’s summary of the 2012 Energy Agreement in its latest publication on Danish energy policy:
In March 2012 a new political agreement on energy was reached in Denmark. This Energy Agreement is an important step towards fulfilling the 2050 target. 95% of the members of Parliament (i.e. all parties but one) stand behind the Agreement. [emphasis mine]
The Agreement contains a wide range of ambitious initiatives, bringing Denmark a good step closer to the target of 100% renewable energy in 2050. The Agreement covers the period 2012 – 2020. By 2020, the Agreement will give the following main results:
- More than 35% renewable energy in final energy consumption
- Approximately 50% of electricity consumption to be supplied by wind power
- 7.6% reduction in gross energy consumption in relation to 2010
- 34% reduction in greenhouse gas emissions in relation to 1990.
Here’s how that has translated into Denmark’s current electricity system (from DanskEnergi’s Follow the Current) –
There are no nuclear power plants in Denmark, and there will not be for the foreseeable future. Denmark does draw electricity from the Nordic power pool at times. Sweden is a member of NordPool and has a lot of nuclear electric generation. Imports from Sweden provide the 5% of electricity that comes from nuclear power. Norway is a hydrpower powerhouse, and Denmark draws on some of that electricity through NordPool. Norway’s hydropower provides some of the base load insurance for Denmark’s wind power generation.
Note that 27% of Denmark’s electricity still comes from coal. Some of this electricity is imported from Germany through Nord Pool, but Denmark still has a number of coal-fired power plants. Denmark must import all of its coal to fuel these plants. The important thing to remember about Denmark’s coal-fired plants is that they are all combined heat and power plants which feed heat into district heating systems. Thus, the overall thermal efficiency of these plants is considerably higher than if they simply exhausted their heat into the atmosphere.
This graph shows how much district heating comes from electrical plants –
Wind power currently produces about 30% of Denmark’s electricity. Denmark’s location between the North Sea and the Baltic Sea provides strong, consistent winds. Denmark’s extensive coast line also means that even onshore turbine sites are strongly influenced by winds from the sea. Wind power is a no brainer for Denmark. Because Denmark is so far north, solar power is not as cost effective for electricity generation, but it is used for certain applications, and PV capacity continues to grow. Sewage treatment plants in Denmark produce biogas and use it for different applications, including electrical generation at their facilities.
Since the 1980s, Danish governments have encouraged renewable power generation using a number of different tools. The most important of those tools remains the feed in tariff, or extra bonus above wholesale prices that is paid to renewable power generators.
Unlike some countries, Denmark protects its non-renewable generators from negative pricing when renewables flood the grid with energy. In periods of high wind power production, if wholesale prices begin falling, wind farms must curtail their production when the price approaches zero on the spot markets.
In 2012, Denmark had some of the lowest cost electricity in Europe at about .17 per kwh. That is just the electricity cost, however. Residential customers pay over .30/kwh including fees and taxes. As we have said often here on The Power Line, it’s not about rates, it’s about bills. Danes’ electrical use averages only about 330 kwh per month compared with West Virginia’s 1100 kwh per month. Danes’ electric rates are three times higher, but their monthly bills are about the same.
Danes also have some of the most reliable electricity in the world. According to DanskEnergi, Denmark’s grid reliability is 99.996%, far above the reliability of the US electrical grid.
While Denmark’s electricity markets are completely deregulated, the country’s grid manager, Energinet, is an agency of the Danish government. Power companies naturally have some influence on Energinet’s behavior, but the agency is not controlled by big generators and transmission companies as in the case with regional transmission organizations in the US. The fact that Energinet is government-owned means that Energinet’s priorities are consistent with Denmark’s overall Energy Agreement. In the US, RTOs are used by power companies to block the development of renewable power.
Denmark’s wind power capacity consists of 3.5 GW onshore and 1.1 GW offshore. If you drive around the country, you will see a lot of small wind farms, no more than four or five turbines, sited near small towns in rural areas. These mini-wind farms are mostly owned by local governments or by local private investors to serve their communities.
On Samsø, ownership of the island’s wind turbines is equally divided among power companies, the municipal government and private investors. The feed-in tariffs and other incentives for wind power provide financial predictability to turbine cash flows, and local banks are very willing to lend money to private investors. A large number of Samsø residents are shareholders in the islands wind turbines because of local financing arrangements. No one complains about wind turbines on Samsø because they belong to everyone, not some distant shareholders in another country.
The diversity of ownership and investment of local communities drives much of the popular support for Denmark’s very successful push for renewable power. People value renewable power because they understand it and live with it and see it working for them every day. And when Danes set about doing renewable power, they committed to doing it themselves. Their wind power industry created the world’s largest wind turbine manufacturer – Vestas. Vestas now has a lot more competitors, but it was the first really international wind turbine producer. The company grew directly out of Denmark’s energy transformation and created a whole new manufacturing sector in the Danish economy.
I have to laugh when I hear coal industry people in WV claiming that renewable power is to expensive or impractical. If that is true, what in the world have the Danes been doing for the last 20 years?