Wind Power in Denmark. Steffen Nielsen Head of Section Danish Energy Authority Ministry of Climate and Energy

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1 Wind Power in Denmark Steffen Nielsen Head of Section Danish Energy Authority Ministry of Climate and Energy

2 Outline Status on wind power deployment and large scale integration Support system and consent model Strategic assessment for future off-shore locations Overview on the environmental programme for Horns Rev and Nysted

3 Advantages of Wind Power Security of supply Energy import alleviation Export Employment Environment i.e. climate change mitigation thus also conservation of biodiversity

4 Key Instruments to promote RE Historic perspective Public support to research, development and demonstration of RE-technologies Investment grants for standardized RE-equipment Favourable prices for electricity fed into the public grid Tax incentives A suitable legislative and planning framework - supporting the local initiative Agreements between the Government and the utilities: Wind power programmes and biomass agreement

5 Danish Wind Power Industry The Danish wind turbine industry employs about 21,000 persons, with a turnover for around 5bn/year (2006) Most of the turbines are exported and today Danish wind turbine industry serves around 40% of the world market in terms of turnover

6 Wind Power Production Installed capacity app MW of which app. 420 MW is placed offshore National average at normal wind conditions 20% of electricity demand Western Denmark % National average % National average January % Western Denmark January %

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8 Challenge: To Feed the Grid with Wind Power (Western Denmark as an example)

9 Large scale integration Denmark has good connection to base load Nord Pool level playing field Short gate closure times to allow trades close to real time Guarantee the transmission and distribution of RE electricity Further integration is possible Storage, demand side management and market driven use of decentralised heat and power as future options

10 New Danish Energy Strategy in 2007 and New Political Agreement in January 2007: The Danish government presented a new long term energy strategy. 21 February 2008: New political agreement. New ambitious targets: Reduce the use of fossil fuels by at least 15% in The share of renewable energy shall increase from 15.6% in 2006 to 20% in 2011 and minimum 30% of total gross energy consumption by Energy saving efforts will be increased with a view to reduce the gross energy consumption by 2% in 2011 and 4% in 2020 compared to Forthcoming EU targets on RE in 2008 for New Danish support measures for renewable energy.

11 The initiatives on better terms for wind turbines in the energy policy agreement A renewable energy law to create greater transparency with respect to the legislative framework for the use of renewable energy. Better subsidy terms for new wind turbines on land Follow-up of re-powering regulations Wind planning in the municipalities, including a green fund for restoring nature 10 million DKK guaranteed financing of local windmill guilds' preliminary studies, etc. Possibility of economic compensation to neighbours for loss of property value due to new wind turbines. Possibility of local joint ownership New offshore wind parks in 2012 ; tender for 2 times 200 MW late Action plan for developing offshore wind turbines.

12 In 2012 Denmark will be on the list of countries with more than 1200 MW offshore

13 16 years of experience offshore First Danish offshore wind farm 1991 Strategic mapping 1995 Capacity now 423 MW. (Total 3100 MW) Tenders for 2 x 200 MW wind farms to be established in 2009 and 2011 on track Arriving at app. 850 MW offshore Aim to bring down financial risk 400 MW to be tendered in 2008 Strategic assessment for future location of 4600 MW offshore wind power

14 Tendering Aim to bring down financial risk Screening for site suitability (2003) Tender: Fixed price in full load hours TSO to finance, construct and operate transformer station and sea cable TSO obliged to connect wind power and expand grid if necessary Security that grid connection is available in due time Financial compensation if the power produced is curtailed One stop shop communication

15 One stop shop consent procedure Political decision Licence to produce electricity Tender for offshore wind farm Construction consent with conditions Concession is granted to the successful tender Licence to preinvestigate sites Environmental Impact Assessment

16 Support scheme for offshore Tender Cheapest, fastest and most beautiful Fixed price in full load hours = years of production Low bid for Horns Rev 2 = app. cent 7 per kwh Premium financed as PSO added on top of market price

17 Preparing for the future sites of 200 MW identified 4600 MW Equivalent to 8 % of total demand or 50% of electricity demand Consultation answers is taken into account A sensitivity analysis is too be conducted and used in the decision-making process for the actual site selection

18 Horns Rev Wind resource: m/s at 100 m More than 4000 full load hours Water dept: m

19 Conclusions from the Environmental programme Public acceptance Migrating birds avoid collision Seals behaviour not affected Harbour porpoises return to the sites Significant artificial wreck effect observed

20 In conclusion Large scale integration possible A doubling of offshore capacity on track for Tender procedure combined with TSO-grid financing and one stop shop brings down financial risks Future locations identified Environment no problem if sites are planned properly

21 Thank you for your attention Steffen Nielsen