Wind Energy: The Case of Denmark

With the British government planning to obtain up to 35% of UK generating capacity from wind turbines by 2020, it is instructive to consider the case of Denmark, one of the few countries that has got anywhere near that level.
 
Denmark generates the equivalent of around 19% of its electricity demand from wind, which on the face of it sounds like a great achievement.  But because wind is intermittent and unpredictable, wind power sometimes meets as little as 5% of Denmark’s demand, with an average over the last five years of only about 9.7% — approximately half of the theoretical level.
 
Because electricity can’t be stored in volume, wind can sometimes deliver too much energy that can’t be used (for example if the wind blows strongly at night when demand is low).  This creates entirely new challenges for transmission system operators.  In the case of Denmark, about half of all the wind energy generated cannot be used, and has to be exported, below cost, to Sweden, Germany and Norway.
 
This brings considerable benefits to consumers in those countries, at the expense of Danish consumers and tax-payers.  It is estimated that exported subsidies from Denmark amounted to €916 million between 2001 and 2008.  Not surprisingly, Denmark’s commitment to wind means that Danish consumers have the most expensive electricity in the EU.  You may think that at least Danish wind-power is saving CO2 emissions in Sweden and Norway, but not so, because those countries rely heavily on hydro power, rather than fossil fuel generation.
 
Wind power has saved some CO2 emissions in Denmark, but at a very high cost of €87 per ton.  For comparison, investment in building insulation can save CO2 emissions for between €10 and €20 per ton.
 
British estimates of the cost of wind power typically assume a 25 year working life for turbines.  But the Danes are finding that ten to fifteen years is more realistic — massively increasing the already high cost of wind generation.  We are promised that green energy initiatives will increase employment.  In Denmark this has proved to be the case, but the net new employment is small, and the cost-per-job in terms of subsidy is estimated at between 175% and 250% of the average worker’s wage in Danish manufacturing industry.  In terms both of power generation and job creation, wind power is fantastically costly and inefficient.  Wind power investment and subsidy have had the effect of moving employment from more productive sectors in Denmark into the less productive wind industry, which has had a negative effect on Danish GDP.
 
There are lessons here for the UK.  Our Labour government has naively assumed that if we build enough wind farms to deliver 35% of our electricity requirements, then that is what we shall get.  The Danish experience suggests that we may be able to use only half of it; that it will fail to deliver the anticipated emissions savings or significant net new employment; and that it will damage prosperity and growth.  We have been warned.
 
Source: The Danish Center for Politiske Studier (Centre for Policy Studies), Sept 2009; www.cepos.dk