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Renewable Energy Technology Deployment and Danish Experiences Senior Policy Advisor Annette Schou The Danish Point of Departure 1973-74 oil crisis 2 countries 99% dependent on imported energy Japan Denmark (oil and coal) Supply situation exacerbated by inefficient energy use

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renewable energy technology deployment and danish experiences

Renewable Energy Technology Deployment and Danish Experiences

Senior Policy Advisor

Annette Schou

the danish point of departure
The Danish Point of Departure
  • 1973-74 oil crisis
  • 2 countries 99% dependent on imported energy
    • Japan
    • Denmark (oil and coal)
  • Supply situation exacerbated by inefficient energy use
  • Pollution caused by fossil fuels
today some 30 years later
Today – Some 30 Years Later

Main Results - Denmark:

  • Net exporter of oil and gas
  • Lowest energy consumption per unit of GDP in EU
  • Highest contribution to electricity from new renewables in EU (world)
  • Most efficient clean coal technology world wide
today some 30 years later4
Today – Some 30 Years Later
  • De-coupling economic growth and energy consumption

High economic growth: GDP +56 % since 1980

Primary energy consumption constant: 2 % higher in 2004 than in 1980

CO2 reduced substantially: 35 % lower in 2004 compared to 1980

three main reasons for de coupling e conomic growth and energy consumption
Three Main Reasons for De-coupling Economic Growth and Energy Consumption
  • District Heating and CHP
  • Energy Savings
  • Renewable Energy

Particular emphasis on wind power in this presentation

renewable energy in denmark
Renewable Energy in Denmark
  • Highest contribution to electricity from new renewables in EU
wind power a good business
Wind Power – a good business

Installed capacity = 3,118 MW (2004). 420 MW is off-shore (529 MW globally)

Wind power supplies almost 20% of the gross electricity consumption (2005)

The Danish wind turbine industry employs 20.000 persons and sells turbines for 4 Billion US$ (2005)

Most of the turbines are exported and Danish wind turbine industry serves 1/3 of the world market (2005)

16 years of offshore wind experience
16 Years of Offshore Wind Experience
  • First Danish offshore wind farm 1991
  • Strategic mapping 1995
  • Capacity now 423 MW.
  • 2 x 200 MW wind farms to be established in 2009 and 2010
  • Existing and approved off-shore capacity (825 MW) = 8% of total electricity consumption in 2010
  • Potentials = 50% of electricity consumption
grid management of fluctuating wind power
Grid Management of Fluctuating Wind Power
  • Large regional grids (only 2 transmission grids in DK) provide access to back-up capacity.
  • Nord Pool: Level playing field ensures cost-effective back-up capacity from Nordic region
  • Short gate closure times to allow trades close to real time
  • RE electricity is guaranteed transmission and distribution
  • Further integration of wind power is possible
  • Storage as a future option
high public acceptance of wind power
High Public Acceptance of Wind Power
  • Wide spread grass root support (except close neighbours!)
  • Bi-partisan political support and leadership
  • Incentives for small-scale local investments in the first years.
  • Careful involvement of the public in decision procedures. Compulsory public hearing.
  • BUT: Problem of the past = Oversubsidiation
production cost at danish on shore wind power plants
Production Cost at DanishOn-shore Wind Power Plants

A wind mill on a good site is competitive with a gas-fired power plant by 2010.

Feed-in tariffs must be adjusted accordingly or replaced by market tariffs.

need to diversify support mechanisms
Need to Diversify Support Mechanisms
  • Danish experience shows advantages with an evolution in support mechanisms
    • Investment grants
    • Fixed feed in tariff
    • Market based tender (variable premium)
  • Feed in tariffs have their advantages
  • Market based systems to be considered on the long time frame
  • KWh-subsidies gradually replaced by support to R&D for new wind mills
  • Still support of 1.3 Eurocent/kWh for new mills
confidence building measures for investors in offshore parks
Confidence-Building Measures for Investors in Offshore Parks
  • Screening to mature site suitability
  • Fixed price in 50,000 full load hours (last tender: almost 7 Eurocent per kWh as fixed price for 12 years without compensation for inflation)
  • TSO to finance, construct and operate transformer station and sea cable
  • Security: Grid connection is available in due time
  • Financial compensation if the power produced is curtailed = Estimated loss from unrealised sale
  • Contractual agreements – adjustment in tender conditions
  • One stop shop communication
lessons learned on re deployment
Lessonslearned on RE-deployment
  • Long-term strategy and commitment needed on development and research programmes.
  • Develop technical standards. Technology drivers are an important incentive.
  • Gradually prioritize the deployment efforts - different strategies for different stages of technology development.
  • Mature stage => more market oriented focus
  • Transparent and confident-building measures for investors
  • Government coordination to facilitate smooth administrative procedures, credit facilities, appropriate subsidy schemes

Lessons learned from Wind Power:

  • Prices are constantly falling (don’t over-subsidize).
  • Integration of a large capacity of wind is possible.
  • But some support is still needed
  • Total support for wind in DK (19%) increases the total end-user price by ¾ Eurocent per kWh (excl. tax)
new danish energy strategy in 2007
New Danish Energy Strategy in 2007
  • 19 January 2007: The Danish government presented a new long term energy strategy entitled “A Visionary Danish Energy Policy”
  • Long term vision: Denmark should in the long term become entirely independent of fossil fuels
  • Targets for 2025:
    • Reduce the use of fossil fuelsby at least 15%.
    • The share of renewable energy must be at least doubled to minimum 30% of total gross energy consumption by 2025. This implies that more than half of the electricity consumed will be supplied by renewable energy and 10% share of 2. generation biofuels in transport by 2020.
    • Energy saving efforts will be increased by 1.25% annually with a view to holding overall energy consumption static until 2025.