For Denmark, read South Australia

Denmark has led the charge for renewable energy, but now the green policies have become too expensive.

danish-wind-turbines-flickr-cpg-greyeurope-power-prices-2

In 2015, Denmark set a new world record by generating the equivalent of 42.1% of the country’s total energy consumption by wind. Denmark is also the world’s largest exporter of wind power equipment. So it’s fair to say that Denmark is perhaps the world’s leading wind power nation.

In 2012 a 95% majority in the Danish parliament arrived at a political agreement for 50% of energy consumption to be from wind power by 2020, and 84% by 2035.

The Danish government has now completely changed its mind.

Recently, the Danish government decided to abort the plans to build five offshore wind power farms, which were to stand ready by 2020.  At the same time, Denmark is also scrapping its green energy tariffs and abandoning some of its climate goals.

“Since 2012 when we reached the political agreement, the cost of our renewable policy has increased dramatically,” said Minister for Energy and Climate Lars Christian Lilleholt to Reuters. 

The cost of subsidizing wind power has become increasingly heavy as energy prices in the Nordic countries have fallen dramatically over the last couple of years, making the renewable alternatives a lot less attractive.

Danes pay some of the most expensive electric bills in the world.

The Danish consumers and companies pay the highest prices for electricity within the European Union, EU, according to an analysis from the European Electricity Association, Eurelectric.

The analysis showed that in 2014 a staggering 66 percent of the average Danish electricity bill went to taxes and fees, 18 percent to transportation and only 15 percent of the price was for the electricity in itself. Only Germany came close with 52 percent in electricity taxes.

Without all these extra costs Danes would pay below the European average for their energy.

“We can’t accept this, as the private sector and households are paying far too much. Denmark’s renewable policy has turned out to be too expensive,” the climate minister said.

Following a recent decision from the European Commission, Denmark is obliged to get rid of the tariffs, the Local reports. The ruling was that the tariffs implied unfair competition between energy producers.

The green energy tariffs were prognosticized to generate $10.5 billion between 2016 and 2025, according to the news agency Ritzau.

The price tag for buying power from the five cancelled wind farms would have been $10.6 billion – which was deemed way too expensive for the Danish consumers.

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25 Responses to For Denmark, read South Australia

  1. Artist Formerly Known As Infidel Tiger

    The US is now exporting gas to Kuwait and the UAE.

    If we were smart we would be fracking ourselves silly, but we are dumb. So dumb.

  2. Nicholas (Unlicensed Joker!) Gray

    The EC is ordering Denmark around? Dexit, anyone?

  3. Bruce of Newcastle

    The analysis showed that in 2014 a staggering 66 percent of the average Danish electricity bill went to taxes and fees

    I suspect those taxes are going to pay for the over-the-odds c/kWh that is required to pay the wind companies.

    I don’t know about the Danish case in the UK the wind operators are paid a strike price, which had been previously agreed. The strike price is the minimum that they get for their electricity. If the market price is less than the strike price somebody has to pay them the difference. I suspect that is what the taxes are going to.

    Wind farms seem to be typically getting £82.50 onshore and £115-120 offshore per MWh. In Oz dollars that is $144 and $200-210. Coal fired power here would cost about $40/MWh wholesale. By contrast the wholesale cost of electricity in the UK is around £35/MWh. So the wind farms are getting twice or three times what everyone else gets. And the UK is a windy place.

    Add in that someone also has to pay for the fixed costs of the back up generators when the wind doesn’t blow and you can see how it multiplies and multiplies. It’s insane.

  4. Fred Lenin

    Who owns the windfarm companies? Soros ? Golbman sachs ? The German banks ? alf gore? Malcom turnbull ? theresev rein? The communist party of China?

  5. tbh

    I seem to recall that Denmark bought a bunch of their energy from Sweden and Germany? At the time when I read about this both of those countries were big into coal and nukes. Obviously Ze Germans have decided that they’re shit scared of nuclear power and have gone renewables, which will hurt them. So the upshot is that the Danes, far from being clean energy angels, have actually been using just as much “dirty” power as anyone, just not generating it themselves.

  6. tbh

    From memory where I got this information was an episode of Foreign Correspondent.

  7. Bruce of Newcastle

    tbh – Denmark relies on Sweden for load levelling via a big fat interconnector. They buy hydroelectricity to balance the wind variations. Sweden makes good money this way. The fun bit comes when it’s really windy, then Denmark has had to pay Sweden and Germany to take the extra electricity off their hands. You can’t store electricity and you can’t just dump it on the ground if there’s too much.

    South Australia does the same – they use Victoria as a giant battery whether they like it or not. They’re frantically expanding the interconnector capacity to avoid the problem which recently happened when spot electricity prices hit an astounding $14,000 per MWh. Tassie, another epic bird muncher, is likewise planning to double its interconnector after the Basslink fiasco.

    The problem would be if Shorten could get his 50% renewables policy up we’d be stuffed as there is no interconnector to Indonesia. 😀

  8. Notafan

    Amazing the difference a change of government makes.

    Immigration policy and climate crap overturned by Danish conservatives.

  9. Bruce of Newcastle

    I should say you can’t cheaply store electricity…like you can coal in a pile on the ground or water in a hydroelectricity dam.

    A set of batteries able to power Denmark for a whole day would be a sight to see. How many billions of dollars they’d cost I don’t know. Oh ok, I can do the sums. Denmark consumes about 100,000 MWh per day. You can buy a 5,000 MWh of batteries for about US$5.2 billion, so 100,000 MWh would cost $104 billion. About $18,500 for every man, woman and child in Denmark. For one day of no wind.

  10. Bruce of Newcastle

    Oops, my mistake, divide by three. I used 5,000 MW not the 15,000 MWh number at the link. Sorry. Pesky scientific units. Although I expect you couldn’t fully discharge the batteries without severe issues.

  11. Snoopy

    I should say you can’t cheaply store electricity…like you can coal in a pile on the ground or water in a hydroelectricity dam.

    Bruce, why can’t the Danes use excess capacity to pump water up into a hydroelctric dam in the Danish alps?

  12. Robbo

    The Danes were stupid to sign up to this appalling confidence trick but they were not alone. Governments around the world, including our own Federal and State governments, have joined in the rush to spend countless billions of public money lining the pockets of the wind power preachers. Not only do their huge contraptions blight the landscape and kill birds, they also fail miserably to achieve what the confidence tricksters promised. But still the idiots line up to plunge more money into this stupidity. Just two days ago Daniel Andrews, the Premier who did so much to ensure the return of the Turnbull Government, announced an expansion of wind power in Victoria. Good one Danny boy. You will definitely be remembered for many decades after you have departed your office as the most stupid, gullible, incompetent dill to have ever been Premier of Victoria. Quite an achievement when we remember a mumbling misfit like Steve Bracks also had that job. Maybe one day we will have a Head of Government somewhere in Australia who will be smart enough to denounce wind power for what it is, a costly, inefficient confidence trick.

  13. Bruce of Newcastle

    Bruce, why can’t the Danes use excess capacity to pump water up into a hydroelctric dam in the Danish alps?

    😀
    But that of course leads to the Greens’ aversion to building dams here. Which is just as hypocritical as their aversion to nuclear power.

  14. tbh

    Bruce, thanks for the info.

    I looked up the power generation stats for Sweden just now and yes, they do hydro, but they also do nukes in almost equal proportion:

    https://en.wikipedia.org/wiki/Electricity_sector_in_Sweden

    The numbers for Germany are a little harder to compare and a little out of date, but they still produce significant amounts of power with fossil fuels.

    https://en.wikipedia.org/wiki/Electricity_sector_in_Germany

  15. Robert O

    The politicians can waffle on about 50% renewables and so on, but what is the reality?
    Today at 6 pm. the consumption of electricity was 28,125 MW. This came from :
    Thermal stations……24, 000 MW
    Hydro stations…………4,000 MW
    Wind farms…………………125 MW
    Solar Farms………………..000 MW
    So with all the government subsidisation of renewable projects, today they only operated at 0.44% of their rated capacity. OK it wasn’t very windy, but this happens every 4 or 5 days when a high pressure system covers SE Aust. At the moment the back-up electricity is coming from the coal stations, but in the future when they are closed it will be cold showers, black-outs, no washing machines, street lighting and so on. This is fact not some green fantasy supported by bankers who want to trade in carbon.

  16. .

    Not going nuclear is insane.

    A gen IV integral breeder reactor has fuel for thousands of years, can use waste as fuel and cannot be used for dirty bombs or fissile material (standard nukes).

    No other power source will work when we unlock cheap propulsive methods for space travel.

    We’re not going to lug around a coal mine in space.

    What matters is economies of scale (you see this in studies of oil price derived from large scale shale oil). If the world adopted nuclear power decades ago, it would be cheaper than all other sources now.

  17. tbh

    Dot, I was having the same discussion on the weekend. Nukes, especially modern reactors, are the best and most efficient source of power on the planet right now. As I understand it, thorium reactors (LFTR’s) are as safe as houses, comparatively speaking. They were apparently first developed in the 60’s and somehow have been developed no further (not for commercial use anyway). I don’t get that.

  18. .

    You can only really chalk it up to irrational fear mongering.

    They use waste as a fuel source! They’d solve the issue of nuclear waste we’ve already accumulated and produce no more.

  19. Bruce of Newcastle

    As I understand it, thorium reactors (LFTR’s) are as safe as houses, comparatively speaking.

    I wouldn’t say that, but then I’ve been involved with ultra corrosive halide based stuff for a long time. Aqueous solutions as well as molten salts.

    The proponents will get a rude shock when their materials of construction fail and they keep on having to shovel up highly radioactive frozen thorium fluoride off the floor.

    Most processes like that fail at the demo plant scale.

    I favour the discrete fuel element model for thorium, ie same as conventional power reactors, since compartmentalization means a point failure is easy to rectify – pull out the dud element, replace it and keep going.

  20. Spread the word – it is so obvious we need to take stock.

    Moratorium required on further Australian wind power
    http://www.warwickhughes.com/blog/?p=4612

  21. Bruce of Newcastle

    Wazsah – I get a 406 error when I try to go to that page. Your main page comes up OK though, as does the page from yesterday.

  22. Thanks Bruce of Newcastle – at odd times I get blocked too – the link worked just now – I assume rickety network of hosts HDD’s somewhere in NE USA –

  23. Bill

    If those 350MW of cancelled offshore windies had an ACF of 40%, that US$10.6Bn is worth US$432 per MwH – if its a 20 year contract. The Australian wholesale price, (except in SA), is about US$25 per MwH.

    Just loony stuff. (Though I wouldn’t count on all the numbers in press articles being accurate).

    That PSO tarrif is about A$75 per MwH. If it is cut and not replaced it will at least halve the value of Danish renewable assets. And that’s before debt service.

  24. Kool Aid Kid

    Judith I think you need to look at this more closely. The short term pricing was only partly influenced by the weather and the wind generation limits. Two major factors were the downtime on the Victorian grid interconnect and the unusual factors that have sent domestic gas prices through the roof. In fact the two biggest issues are that the national electricity market is not working effectively for a variety of reasons and the gas market also is not bringing on new supply and lower prices despite a tripling or more in wholesale pricing.
    NEM is cluttered with conflicting signals for potential investors in new capacity and especially critical gas plant in places like SA. The gas market is screwed because of huge LNG shipments and very poor management of things like pipeline access regimes and reservoir squatting in Victoria etc.
    this is only going to get much worse unless someone finds a huge breakthrough in battery storage.

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