By 2015, 2600 MW of conventional capacity is scheduled to be taken off line. To replace that requires massive investment in new plant. Investment in wind power and associated infrastructure, including reserve power, instead of other generation will reduce electricity prices by DKK 0.02/kWh, an annual saving for Danish consumers of DKK 40 million (EUR 5.37 million), states EA Energianalyse in a report for the wind industry. "Because wind power leads to electricity prices lower than they would have been without a target of 50% wind, the Danish consumer does not need to fear rising electricity bills," says the industry association's Bjarne Lundager Jensen.
But if the goal is to be reached, a more flexible power system is needed. Wind power's potential is limited today because it is largely treated as a supplement to conventional power stations. "In a flexible power system that thought process is turned on its head so that wind power becomes the basis for Denmark's energy production," says the report. "That means turning down production from coal and gas when wind power is available." It adds that the aim is for the cheapest form of power production to be given priority at all times. "With a well functioning energy market, wind power will often be cheapest."
Action is needed now if vision is to be turned into reality. Mileposts must be set for wind power to supply 25% of electricity by 2010, up from just under 20% today, 35% by 2015 and 50% by 2025, says the industry association report, Vindstyrke 50 (Wind Strength 50). Already from 2015, land based wind power will be the cheapest form of electricity available and for that reason will play a central part in Denmark's energy policy.
To clear the way for fewer, but larger, wind turbines the government must issue regional wind power quotas which local authorities are obliged to provide suitable locations for. A new central body should be formed to carry out and oversee planning of wind energy on land and at sea. To ensure continued public support for further wind development, shares should be offered to local people in all commercial wind plant over a certain size and local authorities should invest in wind plant to cover their own electricity demand.
Offshore action plan
Offshore the government should prepare a long term action plan aimed at utilising sites with water depths of ten to 15 metres to keep down construction costs. On average a wind plant of around 250 MW should be installed off the Danish coast every other year to bring total offshore generating capacity to 2500 MW in 2025. That will require political will and strong priority for offshore wind, says the report.
A new market framework is needed. Existing power stations in Denmark are largely paid for and production can be sold into the market at "disproportionately low" prices. "That means the market contributes to trapping consumers and investors into using fossil fuel," says the report. It suggests that as an intermediate measure, wind power be sold at market prices, plus a DKK 0.20/kWh (EUR 0.03/kWh) production incentive for the first five years, to be reduced by DKK 0.05/kWh every fifth year for a period of 15 years.
In the longer term, the report calls for the "creation of an effective and liberalised market for energy which makes it easy for consumers to choose renewable energy and wind power. The goal should be for energy trade over borders to function just as well as it does for ordinary services and goods." The report suggests a cross-border market for trade of renewable energy certificates, either for the whole of Scandinavia or the entire EU.