Denmark just passed a smart energy milestone. Is the UK following?
It’s an ill wind, as they say. Recent stormy weather helped boost wind generation at sites across Europe. Denmark’s offshore farms reported a particularly good month, culminating in a 97GWh bonanza on February 22 when the electricity suppliers’ collective output exceeded the country’s total power requirement. Way to go!
When wind power advocates seek to persuade other European nations to follow Denmark’s example, they usually begin with an acknowledgment that the Danish project has benefitted from two important advantages. The country has a long exposed coastline with shallow offshore waters that are ideal for windfarming, and can boast a tradition of excellence in windmill engineering that is traceable to the 19th century polymath Poul la Cour.
While these considerations are undeniably important, we should also take into account other, more prosaic factors. For a clue as to what those might be, look to a rosy pronouncement on Denmark’s February milestone from Europe’s wind lobby. “It demonstrates … that renewables can truly be a solution to Europe’s needs,” said WindEurope spokesman Oliver Joy, going on to list less viscerally impressive results from other community members including Germany, Portugal… and, as we’ll see later, the UK.
Mr. Joy’s choice of examples is telling. Denmark’s consumers have long been accustomed to paying the highest electricity prices in the EU. Germany is a close runner-up, and Portugal, too, is ‘top five’. To put those rankings into perspective: Danish and German households pay around three times as much for their power as the bottom-of-the-table Bulgarians.
Blowing hot and cold
It’s dangerous to rely on generalizations, but we might suggest a correlation between high energy prices and a particular species of government high-mindedness. Thus, Germany’s painful energy bills are symptomatic of its struggles with a serious carbon addiction. The Danish case is similar, but more complex.
The Danish government has steadily pursued a renewables-heavy power mix since the early 1980s, spurred on both by green visions of self-sufficiency and anti-nuke sentiments. The February milestone was no flash in the pan. The country already generates around 45 percent of its electricity from the wind, and looks set to increase that proportion to 50 percent by 2020.
However, those impressive statistics came at a price. The Danish wind energy renaissance was built on the country’s Public Service Obligation (the clue is in the name). The PSO was a longstanding 11 percent government surcharge on energy bills. Until the levy was finally quashed by the European Commission in 2014, PSO revenues were used solely to finance green initiatives. The single largest beneficiary of this massive windfall was DONG Energy, formerly Dansk Olie og Naturgas, which used PSO income to fund its diversification from fossil fuels into renewables.
Viewed in these terms, the Danish outfit starts to bear an odd resemblance to France’s EDF. Both companies built their particular expertise — in wind and nuclear energy respectively — on decades of public subsidy. And both remain firmly under the control of their national governments.
Such musings return us to the last of Mr. Joy’s success stories, that of the UK. Do we belong among such exalted company? You might be surprised to learn that the UK surpassed Denmark in wind generation nearly a decade ago, and that we’ve since managed to build up the largest offshore generating capacity in the world… without government-sponsored price gouging.
Of course, our commitment to private enterprise also means that, unlike Denmark and France, Britain doesn’t actually own those resources. If the government has kept quiet about our wind power successes, perhaps it doesn’t want to dwell on the way that the UK’s liberalized energy regime benefits the state-controlled enterprises of other EU nations? Here at Planet 9, we keep a close eye on the energy markets of the UK and Europe, and we help our customers to benefit from what we see. Give us a ring to learn more.