Thursday, 17 November 2011

Denmark’s green energy future is built on offshore wind
11 Nov 2011

Twenty years since it built its first offshore wind park, Denmark believes they are key to achieving a future free of fossil fuels. "There is a lot of wind here, and the shallow waters off the Danish coast mean it is not so expensive to build at sea here, as it is in other places," said Steen Gade, a Socialistisk Folkeparti MP who chairs parliament's Climate and Energy Committee. "We have good prospects for producing a very high degree of windmill-generated electricity for Denmark and also the rest of Europe, in the long run," he told Xinhua.

Denmark already has hundreds of onshore facilities and several offshore wind parks. According to the Energistyrelsen, the state energy regulator, the share of installed offshore megawatts jumped from 423 MW in 2008 to 868 MW in 2010. The total installed capacity, at land and sea, equaled 3.8 gigawatts last year, representing 25% of the country's electricity demand.

Moreover, Denmark is good at involving local residents in the planning of wind turbine projects, be they on or off shore. This has helped reduce complaints that wind turbines are noisy, cast irritating shadows and disfigure the landscape. "The Danish cooperative model involves private persons in the ownership of wind turbines, because you want the project to be accepted, and also to avoid the NIMBY or, 'Not In My Back Yard' effect," said Hans Christian Sørensen, board member of the Middelgrunden Vindmøllelaug, a cooperative that owns part of a wind farm in at the entrance to Copenhagen Harbour.

Clearly visible from housing and recreation areas on land, from ships plying the harbour, and from aircraft coming in to land at the nearby international airport, these turbines required full, local acceptance before they could be installed. The idea for the park was raised as far back as 1993, and consultation with area residents and non-governmental organisations about where and how to place the wind turbines started soon after. Moreover, the park is unique because it is the first Danish offshore wind farm based on sale of shares.

"As a shareholder, you buy a share for 4,250 kroner and in the beginning you get about 600 kroner back in revenue every year, which means about 14 to 15% return," Sørensen told Xinhua. "But today, after more than 10 years, we have all the money back and you get about seven% every year on invested capital. People are quite satisfied with this because it is much better than having it in a bank, and at the same time, you are doing something positive for the environment," he explained.

The park, which became operational in 2000, cost about 350 million kroner to build. Today, it has some 8,856 shareholders who are free to trade their shares. According to Prof. Peter Karnøe of Copenhagen Business School, collective ownership has deep roots in Denmark. Banks, dairies and abattoirs have all experienced success with the co-operative model, while onshore wind turbines have been co-operatively owned since the 1970s. "Those who had to look at the wind turbines in their backyard also owned the wind turbines. And when the wind turbine was turning around they could hear the money going into their bank account," Karnøe told Xinhua.

On a windy day, the Middelgrunden windmills, with an installed capacity of 40 megawatts, turn their blades briskly, even as the seawater around them grows choppy, and residents on land turn their collars up against the stiff breeze. The park produces an average 100 GW hours of electricity, equal to meeting the power needs of 40,000 Copenhagen households. The power generated is carried by cables to a transformer plant 3.5 kilometers away, and then to a central grid, which also handles power generated from conventional sources.

From here, it is redistributed to households at a set cost per kilowatt-hour. Under Danish law, wind park operators or utility companies must buy the power generated by wind parks. Individual households and businesses then buy electricity from utility companies. Middelgrunden's experience has also inspired similar co-operatively owned offshore parks near urban areas in Avedøre, in southern Copenhagen, and a 22 MW site off the holiday island of Samsø. "wind farms today are like power stations. They are very huge, so it's important to get local residents on board," said Andreas Krog, a DONG Energy spokesperson on renewable power.

The Middelgrunden park is operated by DONG, Denmark's biggest energy and utility company, which also owns half of the park's 20 turbines. "In a small country like Denmark the number and size of wind turbines you can built on land is limited. (DONG is) looking at offshore turbines because that is where we see huge potential. That is where you have good wind resources and plenty of room," Krog told Xinhua. But large, deepwater offshore parks are costly, needing deep foundations for the turbine towers and long cables to bring the power to transformer stations. They are also more expensive to build and repair because of their location. Thus, they are mostly funded by private or public companies rather than co-operatives.

Krog admits that currently, the cost advantage of offshore parks are few, but they enjoy economies of scale, as dozens of big turbines can be placed without any interference, far out at sea. For instance, DONG already operates a 160 MW offshore park off the west coast of Denmark's Jutland peninsula. It is also building a 400 MW offshore park, equivalent to 111 wind turbines, and designed to meet the energy needs of 400,000 Danish households, in the Kattegat Sea, between Denmark and Sweden.

"Placing these onshore on the Danish landscape would be totally impossible," Krog observed. Meanwhile, smaller offshore projects situated in coastal waters, remain a viable option. "The idea is to have local residents involved in smaller offshore projects where you have the space for it, have better wind, and shallow water near the coast, where it is cheaper to install parks than in deep water," Sørensen remarked. Today, around 17% of Denmark's total energy production comes from renewable sources including wind, biomass, and solar power. The Danish government wants wind power to represent 50% of electricity consumption by 2020, and to phase out fossil fuel use by 2050.

Wind parks, both on and offshore, remain central to achieving these targets, but that will mean pricing green power correctly. "We should not be trapped in a situation where the government has to agree on too high a price for wind power," Karnøe cautioned. He was referring to cases in which the government has supported an above market-rate price per kilowatt-hour of electricity produced by offshore wind parks, so as to encourage renewable power projects.

"Too high a price not only raises the overall energy price but also gives a bad reputation: that wind power is nice, but too expensive," he explained, adding that it is only too expensive if one does not account for environmental costs accruing from fossil fuel use. But the government is confident that wind power will become cheaper. "As evolution in the industry continues, windmill electricity is becoming more and more competitive, and the amount of money that we use to support it, is going to be lower and lower," Gade said.