Saturday, July 24, 2010

Breaking Wind In Denmark

The EU is one of the leading global regions in...Image via Wikipedia
Governments in Western democracies make changes to the level of taxation, elimination or addition of new policies to reflect the political landscape. In countries that do NOT have open elections based in democratic roots, the taxation, elimination of services or new restrictions are not debated in the media or society without peril. 

In Ontario we have recently seen the decision by the Ontario government to back peddle on a new eco-fee that does not make sense.

In British Columbia a large number of citizens have been actively engaged in having the provincial government to stop the implementation of the H.S.T.

Denmark generates the equivalent of about 19% of its electricity demand with wind turbines, but wind power contributes far less than 19% of the Nation’s electricity demand.

The claim that Denmark derives about 20% of its electricity from wind overstates matters. Being highly intermittent, wind power has recently (2006) met as little as 5% of Denmark’s annual electricity consumption with an average over the last five years of 9.7%.

In the absence of large-scale electricity storage, any modern electricity system must continuously balance electricity supply and demand, because even small variations in system voltage and frequency can cause damage to modern electronic equipment and other electrical equipment.

Wind power is stochastic,especially in the very short term (e.g., over any given hour, 30 minute, or 15 minute period). This has created a completely new challenge that transmission system operators (TSOs) all over the World are only now learning how to handle. Some draw from Denmark’s experience. But Denmark’s special circumstances make its experience of limited transferability elsewhere.

Denmark manages to keep the electricity systems balanced due to having the benefit of its particular neighbors and their electricity mix. Norway and Sweden provide Denmark, Germany and Netherlands access to significant amounts of fast, short term balancing reserve, via interconnectors. They effectively act as Denmark’s “electricity storage batteries”. Norwegian and Swedish hydropower can be rapidly turned up and down, and Norway’s lakes effectively “store” some portion of Danish wind power.

Over the last eight years West Denmark has exported (couldn’t use), on average, 57% of the wind power it generated and East Denmark an average of 45%.The correlation between high wind output and net outflows makes the case that there is a large component of wind energy in the outflow indisputable.

The exported wind power, paid for by Danish householders, brings material benefits in the form of cheap electricity and delayed investment in new generation equipment for consumers in Sweden and Norway but nothing for Danish consumers. Taxes and charges on electricity for Danish household consumers make their electricity by far the most expensive in the European Union (EU)1. The total probable value of exported subsidies between 2001 and 2008 was DKK 6.8 billion (€916 million) during this period. A similar amount was probably exported prior to 20122 and larger quantities will be exported following the commissioning of 800 MW of new offshore wind capacity in 2013.

The wind power that is exported from Denmark saves neither fossil fuel consumption nor CO2 emissions in Denmark, where it is all paid for. By necessity, wind power exported to Norway and Sweden supplants largely carbon neutral electricity in the Nordic countries. No coal is used nor are there power-related CO2 emissions in Sweden and Norway.

Critical Analysis or Rebuttal to above here

Recently, a study made by the Danish think tank CEPOS claimed the opposite, i.e. that most of the Danish wind power has been exported in recent years. However, this claim is based on an incorrect interpretation of statistics and a lack of understanding of how the international electricity markets operate. Consequently, the results of the CEPOS study are in general not correct. Moreover, the CEPOS study claims that using wind turbines in Denmark is a very expensive way of reducing CO2 emissions and that this is the reason for the high energy taxes for private consumers in Denmark. These claims are also misleading. The cost of CO2 reduction by use of wind power in the period 2004-2008 was only 20 EUR/ton. Furthermore, the Danish wind turbines are not paid for by energy taxes.
Danish wind turbines are given a subsidy via the electricity price which is paid by the electricity consumers. In the recent years of 2004-2008, such subsidy has increased consumer prices by 0.54 €¢/kWh on average. On the other hand, however, the same electricity consumers also benefitted from the wind turbines since the wind power decreased the electricity market price on Nord Pool. On average during 2004-2008, such effect decreased the consumer prices by 0.27 €¢/kWh and consequently the net influence during this period increased consumer prices by only 0.27 €¢/kWh equal to only 1-3 percent of the final consumer prices. In 2008, the net influence of wind power actually decreased the consumer price slightly by approx. 0.05 €¢/kWh. Consequently, the influence of Danish wind turbines on the consumer electricity price is negligible.

Two sides having a debate about the effectiveness of the cost of windmills. In a Western democracy we have citizens, groups being engaged. In other countries like China, North Korea, Iran, Saudi Arabia the media or its citizens are not free to engage in criticism without peril.

Are the changes to reduce the carbon footprint in Canada going to be based on facts of a business model that makes sense, or it is going to be uses as political football for stakeholders that benefit from taxpayer subsidies?

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