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Danish island touts clean energy, but reality sets in

SAMSOE, Denmark -- In the late 1990s, Denmark set out to turn this farming and summer-vacation island in the Kattegat Sea into a showcase for clean energy. The government dangled generous financial subsidies. A former environmental studies teacher, Soren Hermansen, was hired to persuade residents to invest in wind turbines, solar panels, electric cars and giant straw-burning furnaces.

Today, Mr. Hermansen hands out glossy brochures at energy conferences depicting an ecofriendly Samsoe awash in wildflowers. But Samsoe's 4,300 permanent residents never gave up their gasoline-fueled cars. Only a third of the island's 18 villages signed onto a cooperative heating program. Elimination of a tax credit for solar power brought installation of panels to a halt. Wind power, which once showed the most promise, also faces an uncertain future.

The mixed results on tiny Samsoe demonstrate the hurdles of taking alternative energy mainstream. Last week in his State of the Union address, President Bush proposed ramping up federal funds for researching new solar, wind and nuclear technologies. Mr. Bush also linked energy independence to national security and freedom from Middle Eastern oil -- echoing Europe's long-standing argument for fostering renewable energy sources.

But even the European Union's most environmentally conscious members are finding that it isn't easy to get people to commit to change. And the trade-offs can be costly: Denmark's cutting-edge wind industry, for instance, has flourished on the back of Danish businesses and consumers who pay government-mandated premiums for wind power and... more [truncated due to possible copyright]  
Today, Mr. Hermansen hands out glossy brochures at energy conferences depicting an ecofriendly Samsoe awash in wildflowers. But Samsoe's 4,300 permanent residents never gave up their gasoline-fueled cars. Only a third of the island's 18 villages signed onto a cooperative heating program. Elimination of a tax credit for solar power brought installation of panels to a halt. Wind power, which once showed the most promise, also faces an uncertain future.

The mixed results on tiny Samsoe demonstrate the hurdles of taking alternative energy mainstream. Last week in his State of the Union address, President Bush proposed ramping up federal funds for researching new solar, wind and nuclear technologies. Mr. Bush also linked energy independence to national security and freedom from Middle Eastern oil -- echoing Europe's long-standing argument for fostering renewable energy sources.

But even the European Union's most environmentally conscious members are finding that it isn't easy to get people to commit to change. And the trade-offs can be costly: Denmark's cutting-edge wind industry, for instance, has flourished on the back of Danish businesses and consumers who pay government-mandated premiums for wind power and other alternative energies.

Such premiums, which are used in most of the EU's 25 member countries to spur alternative-energy development, have made Denmark a leader in wind power. The Nordic country of 5.4 million today gets 20 percent of its electricity from wind, more than any other country in Europe.

Now, though, the Danish government is pulling back on energy incentives, arguing that they are a drag on the economy. The effect won't be felt fully until 2010, when current fixed-price contracts for wind power expire and turbine owners are thrown into the free market.

But Samsoe, a 16-mile long island with homes of thatched roofs and white-washed walls, may offer a preview of things to come.

Once a staging ground for Viking raids, Samsoe -- a two-hour ferry ride from the Zealand mainland west of Copenhagen -- is today a rustic destination for tourists who come for bike riding, beachcombing and wind surfing.

In the late 1970s, Mr. Hermansen and his father were farming potatoes, red beets and cucumbers here when Danish authorities proposed building a nuclear power plant west of the island. The younger Mr. Hermansen became active in the country's antinuclear movement which, by the 1980s, had won a campaign to ban nuclear power in Denmark.

To compensate, the government introduced an array of subsidies and tax credits for alternative energy, mainly wind power. Utilities were required by the government to buy wind power at above-market rates, sometimes double the market price. The guaranteed high profit meant even small-time investors could play. "People started buying wind turbines to help pay for their retirement," says Ture Falbe-Hansen of the Danish Energy Authority. Clean, alternative energy was officially hot.

In 1986, disillusioned by the trend toward agricultural mass-production, the Hermansens sold their farm. The elder Mr. Hermansen turned to sculpting, and the son became a teacher. In 1997, he was leading private classes in environmental studies when Denmark and other European countries signed the Kyoto Protocol to reduce greenhouse-gas emissions. In the spirit of Kyoto, Denmark decided to crown one of its 400 islands as a "renewable energy" island.

Five islands submitted contest proposals. All made use of wind energy. But Samsoe's entry, spearheaded by an engineer from Aarhus named Aage Johnsen, envisioned some bold innovations. Among them: Using water-filled tanker trucks to capture heat from the diesel-powered ferries that serve the island. The hot water then would be pumped into a municipal heating system.

On the strength of such ideas, Samsoe's entry won. As a prize, the government allowed Samsoe to market itself as "The Danish Renewable Energy Island" and offered the project free technical advice. Mr. Johnsen became manager of the new Samsoe Energy Co. He hired Mr. Hermansen to persuade island residents to take advantage of an array of Danish subsidies for renewable energy. Those included cash to help buy individual wood-pellet-fueled furnaces, tax credits for installing solar panels and fixed-price contracts for wind energy.

To set an example, Mr. Hermansen, 47, bought a wood-burning furnace for the 1930s bungalow he still shares with his wife and son. He also installed solar panels on the garage roof. As a local, part of his job was to convince his fellow Samsoe residents that Mr. Johnsen wasn't "some city slicker" with impractical plans for the insular community. "He was the salesman, I was the planning guy," Mr. Johnsen says.

Not all of the proposals were viable. For instance, without compensation from the government, ferry companies balked at the tanker-truck plan, and that project was jettisoned.

With its guaranteed income, wind energy was more successful. Samsoe residents and outside private-sector investors built 21 wind turbines on Samsoe, including 10 that are erected offshore, in the sea. The island now generates so much electricity that Samsoe sells some back to the Danish grid.

Another of Mr. Johnsen's ideas, dubbed the "String of Pearls," met with only partial success. The goal was to build straw and wood-fueled community furnaces that would pump heat into Samsoe's 18 villages through a network of underground pipes. The straw would be grown by local farmers, and the wood chips would come from trees bought from a privately owned forest on the island. The government offered cash incentives to help finance the new heating plants.

In 1998, Mr. Hermansen began holding town meetings to pitch the idea, emphasizing that straw and wood chips would be a cheap, ecofriendly alternative to the heating oil used on the island. He planted an ally in the audiences, local dairy farmer Erik Andersen, to raise his hand when Mr. Hermansen asked for a show of support. "People are afraid to be the first one to try something new. They need a leader," says Mr. Andersen, 60.

Signaling a positive start, the village of Nordby on the island's northern tip embraced the heating project, building a giant furnace to heat private homes. Additional energy is provided by solar panels, which the village purchased with the help of a government cash grant.

Then in 2001, conservatives ousted Denmark's social democrats amid an economic slump. The new government began phasing out the contracts that guaranteed high income for producers of wind energy. It also ended tax credits and subsidies for solar panels and heating systems fueled by wood, straw and other organic "biomass."

"It was a shift in philosophy, a belief that the market will give more cost-effective solutions," says Ture Falbe-Hansen, a spokesman for the Danish Energy Authority.

The result was a collapse of the overall domestic Danish market for wind turbines. Although the market is small and largely saturated, it had been a laboratory for Danish turbine makers like Vestas Wind Systems A/S to hone their technology. Now, Vestas is depending on China, the U.S. and other markets for growth, but it must compete with large companies that also make turbines, including General Electric Co. of the U.S. and Siemens AG of Germany, for business.

The Samsoe project -- envisioned as a 10-year initiative -- suddenly faced new rules in the middle of the game. Three more community heating plants were eventually built, but they lack solar panels because subsidies for them were abolished. Most of the island's villages concluded that the benefits of joining the "String of Pearls" plan didn't outweigh the hassles of installing new heating systems.

Even the current mayor of Samsoe, Carsten Bruun, decided to stick with oil heat. He rubs his fingers together, symbolizing money, to explain why he hasn't converted his own home-heating system to wood: The government stopped making cash grants to help homeowners cover the upfront payment of about 80,000 Danish kroner, or about $13,000.

"There's so many elderly in this town. It's hard to get them to change," says 82-year old Peder Pedersen from the village of Besser. Describing how he heats his own low-ceiling cottage, he throws back his head and laughs. "Regular old, expensive oil," he says. "But that guy over there, he's really into it."

The dairy farm belonging to his neighbor, Mr. Andersen, has a white-washed cow barn with solar panels on the roof and a muddy tractor outside. On a recent afternoon, dogs with crab apples in their mouths ran up to Mr. Andersen for a game of toss. Mr. Andersen ignored them as he fired up his muddy tractor. A popcorn-like smell filled the air. The tractor runs on oil from rapeseeds, harvested from rape flowers that grow on the island and which Mr. Andersen pressed into biofuel on his own initiative, using a pressing machine he owns.

"Living green makes me feel good," he said. With the tractor idled, Mr. Andersen pulled a dipper from the fuel tank and licked the yellow oil on it. "Not bad," he said.

Mr. Hermansen once had hoped all the island's farm machinery would run on such biofuel. So far, he has been unable to convince farmers that the technology is reliable, and only Mr. Andersen has invested in the necessary equipment.

Sitting in his kitchen, strawberry farmer Mogens Mahler, 47, sipped coffee and gazed at his view of green pasture and wind turbines turning cartwheels against the sky. "That's beautiful," he said. "I really think that, not just because one of them is my own."

Mr. Mahler, who also grows Christmas trees and corn, feeds energy from his wind turbine into the public grid via underwater utility lines to the Danish mainland. A meter tracks his wind turbine's energy production, and a Danish utility pays him well above current market rates.

Unlike Mr. Hermansen and other Samsoe residents who own wind turbines indirectly through shares in cooperatives, Mr. Mahler bought his windmill outright. He credits the government-mandated 10-year contract for making it possible.

"Without that I couldn't have gone to the bank and said, 'Lend me four million kroner," or about $642,000, to help buy the wind turbine, he said. After paying off the loan and covering insurance and maintenance costs, Mr. Mahler expects to earn a pretax profit of about $122,000 over 10 years from his wind-turbine investment.

Mr. Mahler's contract -- and government-guaranteed profit -- runs out at the end of 2009, with no promise of renewal. At that point he may be eligible for a smaller subsidy, but only if he makes additional investments. He plans to wait and see if oil prices continue to rise and increase demand for wind energy.

Despite the setbacks from Copenhagen, Mr. Hermansen is optimistic about Samsoe's example. He has found a new patron: Brussels. The EU now pays half his roughly $60,000 annual salary. It also gave him about $480,000 in seed money to build a seaside building he calls the "Energy Academy" to educate the increasing number of ecotourists who come to Samsoe.

Source: http://www.post-gazette.com...

FEB 9 2006
http://www.windaction.org/posts/1252-danish-island-touts-clean-energy-but-reality-sets-in
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