Significantly, not one new wind turbine was installed under the market rules applicable to new projects from January 1, 2003. Today, electricity from new wind plant is sold at the going market price, plus a premium of DKK 0.12/kWh (EUR 0.016/kWh), up to a total price cap of DKK 0.36/kWh (EUR 0.048/kWh).
A program of incentives for the replacement of old wind plant led to 1480 smaller turbines (122 MW) being taken out of service between April 2001 and the end of 2003, to be replaced by 272 larger turbines with a combined capacity of 323.9 MW. The repowering incentives came to a close on January 1.
As well as turbines installed under the repowering program, 78 units were erected in Denmark in 2003, an indication that turbines can be installed under the current market framework, according to some observers. But 72 of the 78 turbines form the Nysted demonstration offshore wind plant, with a guaranteed production payment of DKK 0.453/kWh (EUR 0.06/kWh) for several years. The remaining handful of turbines installed in 2003 are paid either DKK 0.43/kWh or DKK 0.60/kWh (EUR 0.08/kWh) under special dispensation, or on appeal. In addition, a few small "household" turbines were erected in expectation of receiving the previous rate of DKK 0.60/kWh, only for the owners to learn that they must sell their power at market prices. Furthermore, NEG Micon installed a 4.2 MW prototype at the wind turbine testing station at Risø.
"It is remarkable that not one large turbine has been installed under the market framework in operation since the start of January 2003. The low rate of pay has effectively stopped all construction of wind power in Denmark," says Asbjørn Bjerre, director of the national wind turbine owners association. He is convinced that no new turbines will be sold for installation in Denmark in 2004.
Steps are being taken politically to improve the market for wind power. Parliament is considering a new law that would prevent the many small-scale combined heat and power (CHP) plant in Denmark from producing at full capacity in windy weather, when they undermine the market price for wind. If the proposal becomes law, it could stabilise wind power prices. But further wind plant development would still be hindered by the politically fixed cap for wind payments of DKK 0.36/kWh -- and there is not sign of it being lifted.