As Chris Horner has previously noted, there is something rotten in the state of Denmark.
The Danes have embraced wind energy like no other country. They have put up 5,500 windmills generating about 3,000 megawatts, so that you can hardly travel anywhere without seeing them. In fact, people are getting a little tired of them and nothing much has been built in three years. The Danes claim to get 19 percent of their electricity from windmills and that figure has become a benchmark for other legislatures — including the U.S. Congress — eager to mandate “portfolios” of renewable energy.
But that 19 percent represents only total capacity. In reality, only 10 percent of consumed electricity comes from wind. More than half of wind’s production is dumped into Sweden, Norway, and Germany at bargain prices. Meanwhile, Denmark has the highest electricity prices in Europe. Niels Gram of the Danish Federation of Industries says, “Windmills are a mistake and economically make no sense.” Aase Madsen, the Chair of Energy Policy in the Danish Parliament, calls it “a terribly expensive disaster.”
The CEPOS study Chris recommended — “Wind Energy: The Case of Denmark” (PDF here), by Hugh Sharman, a civil engineer and international energy consultant — offers a clear-sighted evaluation of what’s going on. I will be analyzing the study in a different forum, so forgive me if I bring together a few thoughts:
1) Most of the benefit of Danish wind production accrues to its neighbors, Sweden, Norway and Germany. The numerous subsidies and taxes that the Danes provide are “exported” to other countries.
2) Danish wind could have shuttered a few coal plants in Denmark except for a very efficient system of co-generation installed in the 1980s and 1990s. Small coal plants at the village level provide both electricity and district heating to residential and commercial customers. Unfortunately, this means coal plants can’t be shut down, even when wind is supplying sufficient electricity.
3) Coal plants in Sweden and Norway might close down except there are none. Both counties are supplied almost entirely by hydro and nuclear. Germany has more coal plants but it is also building its own wind complex and is having enough trouble integrating that.
4) Wind power can be cheap — so cheap, in fact, that that at times the spot price of electricity has descended to zero. The problem is that, with their sunken costs, other suppliers of electricity are forced to lose money. Yet they cannot be shut down completely because they have to be there if the wind stops blowing. Wind’s off-and-on nature has caused so much disruption in the electricity market that this month Norpool, the Scandinavian power grid, introduced negative pricing. It will charge suppliers up to 200 Euros per megawatt for putting electricity on the gird in times of excess. The object is to discourage overproduction.
5) Wind suffers none of the economic harm that its frequent disruptions create because it is protected by all manner of subsidies and mandates. Wind has a “feed-in-tariff,” which says utilities must buy it whenever available at a set price. Another law says the pool must buy wind before it buys any other source. Thus wind is virtually prohibited from losing money.
6) Wind could possibly become economical if it were paired with either a system of large-scale electricity storage or another generating source that could be quickly turned on and off to match its vagaries. The only technology now capable of storing commercial quantities of electricity is pumped storage, where water is pumped uphill with off-peak or excess electricity and then allowed to run downhill during hours of peak demand. There are about 30 pumped storage plants around the country but they are regarded as environmentally damaging and new ones would meet fierce resistance. Natural gas turbines are capable of matching wind’s unpredictable patterns but are very expensive to operate. Ultimately, every windmills and solar collectors may be matched with its own natural gas turbine.
7) Without all the subsidies and mandates, it is questionable whether wind could survive in the open market. Although they can operate at zero fuel costs, windmills are expensive to build — about as expensive as nuclear — and only last about 15-20 years, as opposed to 60 years or more for current reactors. Whether people would invest in windmills under these conditions is an open question.
Despite these circumstances, Sharman notes, the Danish people remain enthusiastic about wind energy. They don’t seem to realize they are subsidizing other countries. The Danish Parliament is about to extend the mandate to 25 percent, although the next round will be built offshore and out of sight.
Under certain very special circumstances, then, wind energy could probably reduce carbon emissions and even reduce the need to build new power plants. But it creates awkward problems and comes at a price. Whether it is worth making that sacrifice — not to mention cluttering the landscape with unsightly monstrosities — is a different story.
– William Tucker is author of Terrestrial Energy: How Nuclear Power Will Lead the Green Revolution and End America’s Energy Odyssey.