1. Renewable Energy Technology Deployment and Danish Experiences Senior Policy Advisor Annette Schou

2. The Danish Point of Departure  1973-74 oil crisis  2 countries 99% dependent on imported energy Japan Denmark (oil and coal)  Supply situation exacerbated by inefficient energy use  Pollution caused by fossil fuels

3. Today – Some 30 Years Later Main Results - Denmark:  Net exporter of oil and gas  Lowest energy consumption per unit of GDP in EU  Highest contribution to electricity from new renewables in EU (world)  Most efficient clean coal technology world wide

4. Today – Some 30 Years Later  De-coupling economic growth and energy consumption High economic growth: GDP +56 % since 1980 Primary energy consumption constant: 2 % higher in 2004 than in 1980 CO 2 reduced substantially: 35 % lower in 2004 compared to 1980

5. Three Main Reasons for De-coupling E conomic Growth and Energy Consumption  District Heating and CHP  Energy Savings  Renewable Energy Particular emphasis on wind power in this presentation

6. Renewable Energy in Denmark  Highest contribution to electricity from new renewables in EU

7. Wind Power – a good business Installed capacity = 3,118 MW (2004). 420 MW is off-shore (529 MW globally) Wind power supplies almost 20% of the gross electricity consumption (2005) The Danish wind turbine industry employs 20.000 persons and sells turbines for 4 Billion US$ (2005) Most of the turbines are exported and Danish wind turbine industry serves 1/3 of the world market (2005)

8. 16 Years of Offshore Wind Experience First Danish offshore wind farm 1991 Strategic mapping 1995 Capacity now 423 MW. 2 x 200 MW wind farms to be established in 2009 and 2010 Existing and approved off- shore capacity (825 MW) = 8% of total electricity consumption in 2010 Potentials = 50% of electricity consumption

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

10. Grid Management of Fluctuating Wind Power  Large regional grids (only 2 transmission grids in DK) provide access to back-up capacity.  Nord Pool: Level playing field ensures cost- effective back-up capacity from Nordic region  Short gate closure times to allow trades close to real time  RE electricity is guaranteed transmission and distribution  Further integration of wind power is possible  Storage as a future option

11. High Public Acceptance of Wind Power  Wide spread grass root support (except close neighbours!)  Bi-partisan political support and leadership  Incentives for small-scale local investments in the first years.  Careful involvement of the public in decision procedures. Compulsory public hearing.  BUT: Problem of the past = Oversubsidiation

12. Production Cost at Danish On-shore Wind Power Plants A wind mill on a good site is competitive with a gas-fired power plant by 2010. Feed-in tariffs must be adjusted accordingly or replaced by market tariffs.

13. Need to Diversify Support Mechanisms  Danish experience shows advantages with an evolution in support mechanisms oInvestment grants oFixed feed in tariff oMarket based tender (variable premium)  Feed in tariffs have their advantages  Market based systems to be considered on the long time frame  KWh-subsidies gradually replaced by support to R&D for new wind mills  Still support of 1.3 Eurocent/kWh for new mills

14. Confidence-Building Measures for Investors in Offshore Parks  Screening to mature site suitability  Fixed price in 50,000 full load hours (last tender: almost 7 Eurocent per kWh as fixed price for 12 years without compensation for inflation)  TSO to finance, construct and operate transformer station and sea cable  Security: Grid connection is available in due time  Financial compensation if the power produced is curtailed = Estimated loss from unrealised sale  Contractual agreements – adjustment in tender conditions  One stop shop communication

15. Lessons learned on RE-deployment  Long-term strategy and commitment needed on development and research programmes.  Develop technical standards. Technology drivers are an important incentive.  Gradually prioritize the deployment efforts - different strategies for different stages of technology development.  Mature stage => more market oriented focus  Transparent and confident-building measures for investors  Government coordination to facilitate smooth administrative procedures, credit facilities, appropriate subsidy schemes Lessons learned from Wind Power:  Prices are constantly falling (don’t over-subsidize).  Integration of a large capacity of wind is possible.  But some support is still needed  Total support for wind in DK (19%) increases the total end- user price by ¾ Eurocent per kWh (excl. tax)

16. New Danish Energy Strategy in 2007  19 January 2007: The Danish government presented a new long term energy strategy entitled “A Visionary Danish Energy Policy”  Long term vision: Denmark should in the long term become entirely independent of fossil fuels  Targets for 2025: oReduce the use of fossil fuels by at least 15%. oThe share of renewable energy must be at least doubled to minimum 30% of total gross energy consumption by 2025. This implies that more than half of the electricity consumed will be supplied by renewable energy and 10% share of 2. generation biofuels in transport by 2020. oEnergy saving efforts will be increased by 1.25% annually with a view to holding overall energy consumption static until 2025.