Elsam and Elkraft are the umbrella organisations for the more than 100 electric utility companies in Denmark. Elsam covers the Jutland peninsula (with its long North Sea coastline) and the island of Fyn, while Elkraft's region is the main island of Sjælland, on which the capital city of Copenhagen is situated, and its surrounding islands. The Danish utilities, however, are not the only companies to have seen the potential for developing the enormous wind resource off Denmark's hundreds of miles of sheltered coastline with its many submerged sandbanks.
At least one overseas company is also scouting the region. Svend Enevoldsen of Ecology Management, a small Danish firm based in Randers, confirms he has carried out an analysis of the Danish offshore market for international wind farm developer SeaWest of California. The starting point for the study was an area of shallow water known as Horns Rev off the Danish west coast near Esbjerg, says Enevoldsen. He declines to comment, however, on the results of the study. The westerly winds blowing into Denmark from the North Sea are some of the strongest and steadiest in Europe.
Rumours are also rife that German giant Preussenelektra is making similar plans. The overseas interest in the Danish resource has not gone unnoticed by Elsam and Elkraft. Elkraft has even cited pressure from foreign companies as the reason for its application to develop three offshore wind plants totalling 150 MW. The sites chosen by Elkraft are all south of Sjælland. One is off the tiny island of Omø, another is on Gedser Rev, and the third is on the Rødsand sandbank south of Falster.
Elsam has applied to build two projects totalling 120 MW -- at Horns Rev and in water south of the small island of Læsø in the centre of the Kattegat between Denmark and Sweden.
The applications are now being considered by the Danish government which is grappling with regulations for the ownership and grid connection of offshore projects as well as power purchase rates. The Danish Wind Turbine Owners Association has already advised that offshore wind plant should be operated commercially with no form for subsidy. Flemming Tranæs of the association warns that public opposition is likely if subsidies were paid to offshore wind projects partially or completely owned by foreign investors. Danish wind turbine owners currently receive a subsidy of $0.028/kWh.
Elkraft estimates that a production price for offshore wind of $0.065/kWh is a "conservative guess." Realistically Elkraft's Jan Svenson expects it to be closer to $0.050-0.058, with expectations that technology advances already in hand, such as cheaper foundations and the chance of longer operating life due to the steadier winds at sea, could bring the price down by a further 25-33%. This would make wind power cheaper in Denmark than power from coal fired plant.