Market opened up to all EU citizens -- Denmark's repowering push

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Denmark has lifted all its geographical and quantitative restrictions on wind turbine ownership from May 21, opening the way for investment by any citizen of the European Union in any amount of wind power capacity. The government's stated aim with its new policy is to encourage owners of old turbines to invest in new machines on sites specifically designated for wind development.

Until now, ownership of wind turbines has been restricted to citizens living within a specified distance of their machine, whether they owned the entire turbine or invested in turbine shares. The investment was limited to a share no greater than the holder's annual consumption of electricity, plus 30% excess production. These rules have prevented owners from scrapping their old turbines and investing in new. Old turbines are often sited outside today's wind development zones and therefore cannot be directly repowered.

Energy minister Svend Auken describes the lifting of the restrictions as a "first step towards replacing many of the old wind turbines which today are spread over the Danish landscape." He expects to see fewer, larger more effective turbines which will "increase production of environmentally friendly electricity and over time collect turbines in areas where, in landscape terms, they are more sensibly sited."

Auken is well meaning, but he will be disappointed, warns Asbjørn Bjerre, secretary of the Danish wind turbine owners association. "In the past few days we have been approached by people who own land in areas earmarked for new wind development. A landowner with perhaps three potential sites typically already owns one turbine and had been planning to sell those sites to a developer. Now he will obviously erect his own turbines if it is economic for him to do so. It is hard to see that owners of older turbines will gain access to sites which are economically acceptable."

A proposal by the owners association to grant local citizens first rights to ownership or part ownership of new projects in their vicinity was not taken on board by the government. Local involvement in wind plant is now likely to dwindle, something the wind association fears will have long term negative consequences for the broad public support for wind energy in Denmark.

The Danish wind turbine industry association points out that replacement of the 3400 turbines haphazardly distributed in the landscape before 1992 with new machines in wind development zones would reduce the total number of turbines in Denmark by half while doubling wind power output. Within two to three years, 20% of Denmark's electricity would thus be provided from wind energy, argues the association's Søren Krohn.

No boom

Lifting of ownership restrictions, however, will not create a boom in wind turbine investment until there is more security about what a project can earn, says Christian Kjær of the industry association. The new tariff for wind power is set at DKK 0.33/kWh for a minimum of ten years, plus income from sales of green power credits. But a market on which to trade these green power derivatives -- driven by an obligation on all consumers to buy 20% of their electricity from renewables sources -- will not be launched until January 2002.

Before responsibility for buying wind power passed from the state to the utility sector at the start of the year, the fixed rate of payment was about DKK 0.60/kWh. Existing turbines still receive this rate, but for a limited period of operation before being pushed onto the green credit market (Windpower Monthly, April 2000). An installation rush is now taking place of wind turbines bought last year as these are still be eligible for the DKK 0.60/kWh. Co-operatively owned wind projects have until September 1 to sell all shares and complete contracts. No new wind turbines have been sold in Denmark this year.

Although the lifting of ownership restrictions is seen as a positive step by wind turbine manufacturers, none believe it is enough to kick life into the market under the current cloud of uncertainty. Jens Pedersen of Nordex believes owners of old turbines will only be tempted to reinvest in new turbines if local authorities actively market new project sites. Industry association president, Karl Gustav Nielsen of Vestas, says there have been a number of inquiries following Auken's announcement, but the market remains in an economic straitjacket. Thomas Karst of NEG Micon agrees. He adds that a deal of legwork is needed to convince banks that loans for wind projects could well need to stretch over 13-14 years, compared with the ten years to date.

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