Denmark goes offshore

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With 500 MW of new capacity, wind power in Denmark had its second best year ever in 2002, measured in terms of installed capacity, only exceeded by the 600 MW which went online in 2000. This year the predictions are for over 200 MW of new turbines as owners wait to hear what the new rates of pay, which should have come into force on January 1, will be. Developers of the planned 200 MW have won special dispensation from the end-2002 cut-off date for the old rates.

Last year's development rush was sparked by the government's repowering program along with its warnings that the wind tariff was to be reduced dramatically. The owners of more than 1300 old turbines with low capacity ratings removed one in five of Denmark's over 6000 wind turbines. In the windy west, 1124 units, with a combined capacity of 91 MW, were replaced with 250 MW of new turbines. In the east, 192 turbines (19 MW) were replaced by 41 MW of new turbines. Under the repowering program, replacement turbines receive the former DKK 0.60/kWh tariff (EUR 0.081/kWh) for several years.

The same rate is being applied to a handful of new projects, including the new 23 MW offshore wind station of Bonus turbines off the island of Samsø, which was ready to go online last month. Bonus is also to supply 72 of the same 2.2 MW turbine for the 165.6 MW Rødsand offshore project south of Lolland, to be operational this year. With orders for 180 MW of the over 200 MW of expected new capacity, Bonus will dominate the Danish market in 2003.

New turbines installed this year without access to the old tariff will sell the output at whatever price the market is offering plus a premium of DKK 0.10/kWh (EUR 0.013/kWh) in lieu of what at one time was to have been income from sale of green power certificates. A certificate trading market, however, has been put on hold. In addition owners will receive an environmental bonus, the size of which is still under political discussion, though it should have been available from January 1. The tariff uncertainty has stopped new projects outside the repowering program in their tracks.

That could possibly change. In recent weeks, interest in buying old but operating turbines has been increasing as a result of sharply rising electricity prices, pushed up by hydro power shortages in the rest of Scandinavia. Turbines that because of their age no longer qualify for subsidised rates are free to sell their output on the open market. Electricity prices on NordPool have been up around DKK 0.85/kWh (EUR 0.11/kWh), a fivefold increase over the past year.

Between the extremes of no tariffs for old turbines and EUR 0.081/kWh for newer turbines installed to date, turbines which have used up the allotted number of full-load hours of operation for which they qualify for the old tariff, but which are less than ten years old, receive (EUR 0.058/kWh).

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