Library filed under Impact on Economy from Denmark
The Eurelectric analysis showed that without all of those excess costs, Danes would pay electricity costs under the European average. Lars Aagaard, the CEO of the Danish Energy Association (Dansk Energi) said the high level of taxation is strangling Denmark’s green conversion.
“I think the criticism is over the top,” Lars Christian Lilleholt, Denmark’s energy minister, told the Politiken newspaper last month. He said the country still planned to invest 800 million krone, or $114 million, in green energy research in the coming year. “There is less money, but it is still a lot. And I sit in a government that must find a way for the Danish economy to make ends meet.”
The powerful Danish wind industry in the last six years received over 80 billion, with the bulk of the money going to project owners and investors. At the same time, Danish electricity consumers paid $4.6 billion in so-called PSO charges last year for wind power. That figure has skyrocketed by 270 percent over the past five years.
The credit crisis has prompted banks to restrict loans to wind-park developers that buy turbines from Vestas and rivals such as Germany’s Siemens AG and General Electric Co. At the same time, Europe’s sovereign debt crisis has limited prospects for economic growth in the region.
Vestas, the world's largest wind power company, is to cut up to 3,000 jobs - some 14 per cent of its global workforce - because of excess capacity and a cut in order expectations in Europe. The closures of four production facilities in Denmark and one in Sweden were announced on Tuesday.
Danish company Vestas Windsystems, the owners of a wind turbine factory on the Isle of Wight have fenced off the entrance to the site, where about 25 staff are on the third day of a sit-in. ...The company said the factory was being closed next week due to reduced demand for wind turbines in northern Europe. ... A spokeswoman for the Department of Energy and Climate Change said the plant made blades for the US market which were not the right specification for onshore or offshore wind farms in the UK.
It is important to understand why the Danish government, which appears to have commissioned Mr. Pedersen's comments, is sensitive to critiques of the Danish experience with wind power. Denmark is home to Vestas, the world's largest wind turbine manufacturer, with 20,000 employees and a market share of between 20% and 25%. As the market for its turbines in Denmark and other European countries becomes saturated, it seeks to export the Danish experience worldwide. To this end, it recently ran a multi-million dollar global ad campaign with the slogan, "Believe in the wind," claiming that Denmark has solved the problem of dirty electricity through wind power.
Danish wind turbines are now producing so much energy that they may have to be stopped at night in order to avoid excess production duties. ..."When prices go negative, wind turbines will probably have equipment installed so that you can reduce production," Marketing Manager Nicolaj Nørgaard Petersen tells Jyllands-Posten.
The government’s plan to increase the nation’s reliance on green power could expand a black hole that already sucks nearly two billion kroner out of consumers’ pockets annually. In order to promote construction of wind turbines, the government has agreed to purchase the electricity they generate at a minimum price. The guaranteed prices have had the desired effect: some 5300 wind turbines dot the Danish countryside, producing 18.5 percent of all electricity generated. The practice has its downside, however. The guaranteed prices for wind power results in an overproduction that cost the state an excess DKK 21.6 billion between 2001 and 2005, according to figures from the National Audit Agency. Due to the uncertainty of whether the wind will blow, Energinet.dk, the organisation responsible for ensuring that the country can meet its electricity demand, has to keep a reserve of conventionally produced electricity in case the wind dies down. The extra cost is typically passed on to consumers in the form of higher electric bills.