Denmark's Growing Wind Capacity

Camila Camacho
June 6, 2018

Submitted as coursework for PH240, Stanford University, Fall 2017

Growth of Wind Power in Denmark

Fig. 1: Wind turbines, Jutland, Denmark. (Source: Wikimedia Commons)

During the 1970s, Denmark was a pioneer in the development of commercial wind power. Even through the 2008 economic crisis and the subsequent reduction in wind turbine sales in 2011, wind power capacity around the world has steadily grown. [1] Today, Danish manufacturers still produce much of the world's wind turbines. Over the past 10 years, wind turbines (like the one shown in Fig. 1) have generated a growing percentage of the total electricity used to satisfy Danish electricity consumption, with wind power today amounting to about 30% of electricity consumption in the nation. [2] Denmark has the world's highest penetration in terms of wind power, with a share that has gone from about 3% of electricity demand in 1992 to over 40% of demand in 2015, and has ambitious expansion goals set for 2020. [3]

In 2015, Danish wind turbines generated electricity corresponding to a record-breaking 42.1% of the total Danish electric consumption, the highest proportion for any country thus far. This number increased from 39% the previous year and 33% in 2013. 2016 saw a slight decrease in this figure, probably due to low wind speeds that year, producing only about 38% of Denmark's total electricity consumption (still a significant figure).

Denmark plans to continue the expansion of wind power in the country and has clear goals for years to come. The Danish Energy Agreement, adopted by the Danish government in March of 2012, outlines the initiatives the country will take until 2050 and the policy it will have on climate and energy up to 2020. The Agreement calls for 50% of the electricity consumption to be derived from wind power in 2020, and for over 35% of total energy consumption to be derived from renewable energy sources. [4] In addition, it aims to have a 7.6% reduction in gross energy consumption, relative to 2010, and a 34% reduction in greenhouse gas emissions, relative to 1990. [4] With these goals in place, Denmark hopes to have 100% of its energy supply produced by renewable energy by 2050.

Challenges

If able to achieve the expansion goals it has planned, Denmark's entire energy system will be transformed (organizationally, operationally and economically) as a consequence of these changes. Currently retaining the leading position in wind power, Denmark will be the first to struggle through the complications that come with restructuring a nation's energy system and the repercussions of such. When achieving the goals outlined in the Danish Energy Agreement, a simple reform of policies used in the past will prove insufficient. Instead, an incentive system that encourages investment in wind power will have to be implemented, with additional incentives placed on the integration of the transportation, heating and electricity sectors. [3]

Additionally, the European Emission Trading System does not prove to be sufficient in providing a level playing field for wind power in the current electricity market, making a revision of this system necessary. Another challenge that arises with the growing wind power share in Denmark comes from the citizens themselves, as there is greater resistance on their behalf due to concerns over an unequal distribution of the benefits and burdens that the wind industry produces. A way to address this issue is to allow more types of investors to participate in the industry, with local investors increasing local support and acceptance of further expansion projects. [3]

Effects on the European Economy

In order to meet its 2020 goals as stated by the 2012 Danish Energy Agreement, Denmark plans to build 1500 wind turbines before the year 2020, along with instituting a replacement of its 1300 MW capacity onshore turbines with 1800 MW capacity turbines. [1] Ultimately, approximately 2 GW of new capacity is set to be operationalized before 2020. [2] The additions will further increase wind power shares, encouraging greater integration of wind power into European energy systems and greater turnovers in the wind power industry. As the wind power share continues to grow, the number of hours in which there is a surplus of Danish electricity produced by wind power (i.e., more electricity is produced than consumed) will also increase. A similar increase in wind power capacity is also forecasted to occur in neighboring countries, and the electricity market can soon be expected to become saturated, leading to lower prices. Thus, it seems wise and cost-effective to integrate wind power production at a regional-level. [1]

The Danish population holds a positive view on the increased use of wind power. [2] Looking at the numbers and benefits that come from such use, the rest of the European energy economy should share a similar view in the years to come.

© Camila Camacho. The author warrants that the work is the author's own and that Stanford University provided no input other than typesetting and referencing guidelines. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.

References

[1] F. Hvelplund, B. Möller, and K. Sperling, "Local Ownership, Smart Energy Systems and Better Wind Power Economy," Energy Strateg. Rev. 1, 164 (2013).

[2] "Energy Policy Toolkit on Physical Planning of Wind Power: Experiences from Denmark," Danish Energy Agency, 2015.

[3] F. Hvelplund, P. A. Østergaard, and N. I. Meyer, "Incentives and Barriers for Wind Power Expansion and System Integration in Denmark," Energy Policy 107, 573 (2017).

[4] "Accelerating Green Energy Towards 2020," Danish Ministry of Climate, Energy and Building, March 2012.