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Denmark

Denmark

Government closes door in Denmark -- No new market yet

Confirmation of a matured wind market in Denmark is contained in the agreement reached last month between the government and a majority of the Danish parliament on a new tariff system. In future, the owners of Denmark's oldest wind turbines and the owners of any new turbines must sell all output to the grid at the going market rate, plus a production incentive.

Implicit confirmation of a matured wind market in Denmark is contained in the agreement reached last month between the government and a majority of the Danish parliament on a new tariff system. In future, the owners of Denmark's oldest wind turbines and the owners of any new turbines must sell all output to the grid at the going market rate, plus a production incentive of EUR 0.013/kWh. A maximum limit of EUR 0.048/kWh will apply. The incentive is applicable for the first 20 years of a wind turbine's operation.

Existing arrangements for transition of the majority of Denmark's wind turbines to the new market conditions remain in place (Windpower Monthly, November 2001). But long mooted plans for a market for trade in "green certificates" -- based on a mandate on all electricity consumers to buy an increasing portion of their electricity (represented by green certificates) from renewable sources of energy -- have been postponed. Denmark already produces 20% of its electricity from wind power -- two years ahead of its energy policy schedule.

The EUR 0.048/kWh ceiling has been met with consternation by the wind lobby. The "unrealistically low" tariff for wind power is "unreasonable" for pioneers who invested in wind turbines based on their trust in parliament to do the right thing, says Kristian Jakobsen, chair of the wind turbine owners association.

For the wind industry the new rules will have little impact, says Karl Gustav Nielsen of Vestas, who chairs the industry trade association. He sees them as confirmation of a definitive stop to further expansion of wind power. The ceiling of EUR 0.048/kWh is too low to make wind turbine ownership viable, he says. Vestas has not sold one turbine in Denmark since 1999 when the wind tariff for new plant dropped to EUR 0.056/kWh.

The Danish wind industry also doubts the EUR 0.048/kWh is enough to attract investors to the final three of the planned five large offshore wind plant. The previous government had obliged Denmark's utilities to build the five plant, but only the first two, at Horns Rev and Rødsand, are currently being realised. It is expected that the remaining three will go out to international tender.

Repowering

A new subsidy program -- without time limits -- for stimulating a repowering market for replacement of 130 MW of Denmark's oldest turbines, out of a combined capacity of 2400 MW installed today, has been agreed. Signs that a repowering policy will be effective are now visible. For the first time in 25 years, the number of turbines in Denmark is falling while installed capacity is growing. The effect is most noticeable in the windy west, where 60 turbines, with a combined capacity of 3.4 MW, were removed in the first three months of the year, while eight new units added 8 MW to the system, reports system operator Eltra.

Since then, reports Eltra, about 20 "scrap certificates" a month have been issued to the owners of old turbines. The same trend is visible in the east of the country, where a handful of scrap certificates have been issued, but so far resulting in no new turbines, says Berit Shilling-Nielsen from system operator Elkraft.

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