Lessons from Denmark: Danes Slash Wind Power Subsidies to Salvage Economy

The wind industry is mounted on myth and fuelled by fantasy.

In Australia, its parasites and spruikers must believe that we are still cut off from the known world (suffering from what was referred to as the “tyranny of distance”) when they peddle stories about Europeans still being wedded to wind power.

On that score, one of the Australian wind cult’s “pinup girls” has always been Denmark. No doubt aided by struggling Danish turbine maker, Vestas (the High Church for wind worshippers) the gullible and naïve still believe that Denmark has achieved a wind powered Nirvana. (The hard-hitting Danish docu-drama, Follow the Money – screening on SBS – with Vestas played by ‘Energreen’ – has knocked some of the varnish off, though.)

In the cultists’ eyes wind power can, of course, do no wrong.  Moments when the wind blows, and these things produce more than their usual piddling fraction of their rated capacity, are celebrated with awe and reverence: 10 hours of meaningful output is said by the faithful to make up for the thousands of hours each year when they produce absolutely nothing at all.

Then there’s the inescapable fact that wind power drives retail power costs through the roof: the product of massive and endless subsidies paid to wind power outputs and the need to also pay conventional generators to burn fuel and remain online 24 x 365, to keep the grid up and running and account for total and totally unpredictable collapses in wind power output (see above and below).

As Australia hurtles towards its Federal election plenty of the contenders keep telling us that wind power is the future; referencing Europe and Denmark as the benchmark.

What they don’t tell us is that Europeans and the Danes are all waking up to the fact that these things don’t work – on any level.  The chaos caused by subsidised wind power (social, economic and environmental) has led to subsidies being slashed in the UK; retrospectively cut in Spain; and effectively capped in Germany and Denmark. Here’s the Wall Street Journal adding a little detail on Denmark’s wind power disaster.

Denmark’s wind-subsidy lesson
The Wall Street Journal
16 June 2016

Danes are the latest to question the price of green-energy virtue

The economic costs of Europe’s green-energy religion keep mounting, and now its more devout disciples are starting to doubt the faith. Witness Denmark’s reconsideration of its plans to build new coastal wind farms that would add 350 megawatts of generating capacity.

The Danes are the world champions of wind farms, getting some 42% of their energy from wind last year. But that power hasn’t come cheap, since Danish households pay the highest electricity charges in Europe mostly thanks to Copenhagen’s green levy on electricity bills, the Public Service Obligation (PSO).

Nor is the power particularly reliable. On some gusty days, Denmark’s wind farms produce more power than the western part of the country needs. On other days the turbines are still. A consequence of the hefty subsidies for wind construction is that if Denmark were to export its surplus power on windy days, taxpayers would effectively be subsidizing someone else’s energy consumption.

So some politicians have jumped at a chance for a rethink courtesy of the European Commission, which in 2014 ruled the PSO violates European Union subsidy rules.

In addition to illegally subsidizing local green-power firms, the PSO also dragged on Denmark’s economy. Because the levy moved inversely to market-based energy prices, the tax ate the windfall that Danes otherwise would have enjoyed from falling oil and gas prices. With the economy struggling to hit even 1% growth, voters started asking why they’re paying more taxes on electric bills than other Europeans in order to subsidize wind farmers.

As a result, Parliament is preparing to end the PSO instead of mending it. The plan is to pay some green subsidies from general government revenues, to be raised by increases to income or other taxes once the PSO tax on electricity bills disappears. But with taxes already high, Copenhagen will struggle to raise them enough to replace the revenue lost when the PSO ends. This has triggered a long-overdue debate about cutting some of the subsidies.

The proposal to delay construction of some coastal wind farms will save an estimated seven billion Danish krone ($1.06 billion) over 12 years. If approved by Parliament, this would mark a welcome step toward economic and fiscal sanity.

Wind advocates will note that Copenhagen still plans to add to offshore wind capacity. But the episode demonstrates that there are limits to even the European willingness to sacrifice prosperity for carbon virtue. Britain has also scaled back its wind subsidies, while Germany is trying desperately to mend its wind-power “market.” Economic and political reality is catching up with Europe’s green ambitions.
Wall Street Journal

The WSJ pitches the myth that the Danes get “42% of their energy from wind last year”.

From the IER’s take on it (see below) that sounds like an Energreen pitch, if ever there was one.  But, overblown or not, wind power isn’t delivered on demand; and electricity can’t be consumed in ‘averages’ – it’s a ‘here and now’ kind of thing. Those perilous souls hanging on in the ICU aren’t so very keen on “averaging” out their even more pressing power needs:

‘Averaging’ wind power output gives the same type of meaningless as sticking your left foot in a bucket of boiling water and your right in a bucket of ice. Sure, the temperature you’re exposed to can be ‘averaged’ out – it being no doubt correct to say that the lower extremities are being exposed to 50C, on ‘average’: but, despite that seemingly pleasant ‘average’, for some strange reason, you’ll need treatment for both burns and frostbite.

Averaging wind power output to a grid designed to be both reliable and secure, holds just about the same level of statistical pointlessness. This is how things ‘averaged’ out in Australia’s wind farm capital, South Australia during April:

But bogus statistics aside, there are number of other numbers that (for propaganda purposes) tend to get swept under the carpet.  Here’s just a few of them, courtesy of the Institute for Energy Research from a couple of years back.

Wind Energy – the Case of Denmark
Institute for Energy Research
16 September 2009

“Today, America produces less than 3 percent of our electricity through renewable sources like wind and solar – less than 3 percent. Now, in comparison, Denmark produces almost 20 percent of their electricity through wind power. … When it comes to renewable energy, I don’t think we should be followers, I think it’s time for us to lead.”
President Obama; Earth Day speech; Newton, Iowa; April 22, 2009

President Obama continues to cite Denmark as a leader in the field of wind energy, suggesting on more than one occasion that wind power contributes 20 percent of the county’s electricity.

In fact, Denmark has never met 20 percent of its power demand via wind. In fact, being highly intermittent, wind power has recently (2006) met as little as five percent of the country’s annual electricity consumption, with an average over the last five years of 9.7 percent.

Denmark is a nation of 5.4 million people, situated on real estate that’s considered among the most facilitative for wind power generation in the entire world. The United States is nation of 305 million, with much of its land mass not even ranked as “fair” as it relates to the potential for wind. That Denmark cannot economically meet a 20 percent wind standard should be noted by policymakers in the United States.

What follows are several key findings from the report:

Subsidies: Government subsidy of wind producers over the past decade amounts to roughly $376 million per year. As the decade has advanced, the rate of new building in Denmark has declined sharply – and to maintain their sales, just as in Spain, manufacturers have been forced to concentrate on exporting their technology to foreign markets (USA) where the subsidy potential is higher.

Employment: The public subsidy in Denmark per wind – related job created is 600,000 – 900,000 DKK per year ($90,000-$140,000 USD). This subsidy constitutes 175-250 percent of the average pay per worker in the Danish manufacturing industry.

Electricity rates: Thanks to a combination of expensive base power, taxes and additional charges, Danes pay more for their electricity than anyone in the European Union.

Emissions: The wind power 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 will you find power-related CO2 emissions in Sweden and Norway.

Exports: Over the last eight years West Denmark has exported (couldn’t use), on average, 57 percent of the wind power it generated and East Denmark an average of 45 percent. Denmark sells this power to its neighbors at almost no cost, asking only that its neighbors sell some of their baseload power back to Denmark on the frequent occasions in which the wind does not blow there.
IER