Denmark’s wind problem

Aldyen Donnelly

by  Aldyen Donnelly, Energy Probe

Unfortunately, the Danish wind industry is living up to my prior forecasts—evidence can be found most easily in the fact that here were no new turbines built in Denmark between 2006 and 2009.  

In 2009 the Danish government approved applications for developers to site 1,300 MWs of capacity onshore—1/3 of which were replacement turbines, not incremental capacity.  But the condition of approval was that from then on all new wind power project developers would be required to compensate affected Danish landowners for declines in their property values.  

Most of the incremental capacity that was approved under that condition has not been developed.

More importantly, the last 12 wind turbine manufacturing and/or assembly plants that have been constructed by “Danish” companies have been built outside Denmark—including five in North America. Denmark has been a net importer of wind power technology for at least 3 years.  

In other words, Danish household rate-payers pay over CAD$0.46/kWh for electricity in part to generate more than CAD$0.10/kWh in subsidies for Danish “wind companies”, which the companies have utilized to move the wind turbine/technology industry out of Denmark.

This is not just a Danish phenomenon.

In 2008/9 much was made of new wind turbine manufacturing/assembly capacity that was built in Portugal, as a result of that government’s edict that certain major wind technology suppliers would only get contracts to build capacity in Portugal if they also delivered manufacturing/assembly jobs. 100% of the jobs introduced in Portugal were offset by the same company’s shut down of capacity in Germany.

Germany’s wind technology capacity growth from 2000 through 2006 was almost 100% offset by capacity shut-downs in Denmark—largely but not exclusively by Siemens, who bought Danish capacity and then moved it to Germany.  

In 2006, Denmark’s largest wind technology supplier built an assembly facility in Quebec and shut down balancing capacity in Europe. This was in response to Quebec government incentives, but it was still true that Danish electricity rate-payers put up more to subsidize the new Quebec plant than Quebec rate-payers put up. The idea was to establish a manufacturing/assembly foothold in Quebec to serve a growing North American wind market.

But then the Ontario government selected wind power suppliers based on their commitments to build assembly plants in Ontario. Ontario’s deal with Samsung likely kills the economics of the Quebec turbine facility. The deal with Samsung also likely ensures that Ontario rate-payers will pay a higher price to the offshore Korean turbine technology developers and manufacturers than they would have paid by sourcing their technology in the nascent but world-leading Quebec plant.

While South Korean manufacturing wage rates are lower than Quebec wage rates, the cost of transporting components from South Korea to Ontario overwhelms the cost of transporting those same components from Quebec to Ontario.  And, of course, all money spent on transport within Canada would have stayed in Canada, while money spent transporting manufactured components from Korea to assembly plants in Ontario will largely stay offshore.

The myth of sustainable wind energy jobs is not sustainable under this global equivalent to a manufacturing Ponzi scheme.

Finally, we should note that incremental wind generation capacity is being developed all over the US at incremental electricity rates that are substantially lower that those being imposed on Ontario, Quebec and BC ratepayers. It is entirely a myth that this new Canadian electricity capacity is going to fuel new revenues from electricity exports to the US.

Canadian wind power generators cannot compete with their US counterparts.

I am very sorry that my forecast for the Danish wind industry—and others—is playing out. I endorse the role of wind power in Canada’s new energy mix and I am certain that Canada can develop a viable and export-oriented wind industry. Wind technology is not the problem here.  

The inevitable, predictable Canadian wind energy industry failures will be policy/tax regime and rate-setting failures, not labour force capacity or technology cost failures.  

Too bad our policy makers fell for the myth that Danish, German, UK and California green policies and measures have been successful green job creators, when actual job and investment statistics have long suggested that these nations have launched failing policies.

In the meantime, real, verifiable renewable energy policy successes are evident in Massachusetts, Minnesota, Texas, Austria and Spain, up until 2006, after which the government of Spain shifted to German-style renewable energy policies—polices that proved so disastrous Spain elected to abandon them early in 2008, pre-global recession.  But, to date, no Canadian government appears to have studied or modelled their emerging initiatives after these much more and verifiably successful regions.  

The good news is that it is not too late in Canada to get this right.

Please note that total renewable power capacity in California fell between 1990 and 2006 and has still not recovered to 1990 levels, either absolutely or as a percentage of total California energy consumption. Also note that between 1990 and 2008, the nominal value of Danish electricity and clean electricity technology sales grew 600%, but over the same period, the nominal value of Danish fossil fuel export sales grew 3,500%.  

In 2009, after world oil prices moderated, Danish fossil fuel product exports accounted for 20% of Denmark’s GDP. The Danish economy is currently more dependent on the world’s addiction to oil for economic health than anytime in its history.  

In recent years, Danish electricity sector GHGs have been 10% above 1990 levels and GHGs from transportation fuel use have increased 40%–faster than Canada’s—since 1990. In 2007, Danish per capita passenger car ownership rates surpassed the Canadian rate and according to Eurostat—the official EU statistics agency—since 1990 and since 1997 Danish per capita private passenger car use has increased faster than Canada’s.  

Over both of these periods, Danish passenger train and transit utilization rates and capacity have both declined, both absolutely and on a per capita basis. Train and transit use have also declined in Norway, Sweden and Germany.

Researchers who describe Denmark and Germany as a clean energy policy success stories appear to have missed these and other key facts.

7 thoughts on “Denmark’s wind problem

  1. My goodnes, this is the most nonsens I’ve read in a long time. You are almost wrong in every figure you display.
    Please take your time to read this publication written by the danish ministry of energy.

    You will find that you are wrong in almost every figure regarding wind power history, political agreements, subsidy, etc., etc., etc.,

    http://www.e-pages.dk/energinet/126/

    Best of luck

  2. “I am very sorry that my forecast for the Danish wind industry—and others—is playing out. I endorse the role of wind power in Canada’s new energy mix and I am certain that Canada can develop a viable and export-oriented wind industry. Wind technology is not the problem here. ”

    So improved policy will make the wind blow better? I think not. 🙁

    Will improved technology help energy capture? Yes, if the wind id blowing. But, in Ontario I do not think that we have sufficient sustained wind energy that could ever be terribly useful.

    I beg to differ with the authors opinions.

    double plus ungood!

  3. Wind Energy Is a Scam……an out and out investor’s Scam……..anyone stating that Wind Energy is anything but a losing proposition for every Citizen of this Province is a LIAR!

    Geez…..how much more research has to be done?

    Let’s call a “turd” a “turd”!

  4. David, I think you’ve misjudged.

    Read some of her stuff on Energy Probe.

    You won’t agree entirely with a warmer, but the message she is communicating is the best way to affordably introduce cleaner energy.
    In fact she’d be the first to hope a better technology was given the ability to develop by not locking into the flavour of the day – even as she doesn’t discount the flavour you don’t like.

    She has always struck me as the sharpest knife in the drawer in terms of knowledge of various countries’ program histories, and on the economics applied to carbon pricing.

  5. Scott:

    My points were quite specific. Do you endorse wind power in Canada’s energy mix? I don’t, on a technical basis that comes from analysis of the production.

    Whether anything else that she writes makes sense is another issue.

    Is she right about Denmark? Probably, based on the little analysis I have done of that country — but I really can’t say. As far as I am concerned, other countries can make their own beds in any way they please. I just care about Canada in general and Ontario in particular.

  6. David,

    the article is about the failure of the policies Ontario is copying.

    Her statement you are angry about is an unspecified comment about including wind in some way in the energy mix in Canada.

    I don’t know how jumping all over somebody for a sentence you disagree with would prevent the lady with the blind son, in that heartbreaking video clip posted yesterday, from having to relocate before some jerks drops IWTs a little over 1/2 a km from her house.

    I can see why the article was posted here. Allies are good, even ones of expediency instead of soul mates.

    To me the fact that what is occurring in Europe, and in Ontario, is exactly what she had noted would occur, makes her an important voice.

  7. Scott:

    Don’t see the anger in my comments. Don’t see any reference to the other case.

    Not sure where you are coming from.

    I only addressed the issue that wind turbines do not function technically. I did not address other issues.

    I just don’t see what you see in my comments.

    I will never see IWT’s as useful in the energy mix.

Comments are closed.