The document summarizes trends in wind energy in Denmark, including: 1) Denmark had early adoption of wind power and now generates over 30% of its electricity from wind, with high cumulative installed capacity. 2) Transmission system operators are involved in wind projects by paying for grid infrastructure upgrades, reducing project risks and costs. 3) Denmark makes turbine-level wind data and rules requiring local shares in projects public, improving acceptance. 4) Project costs have declined over time due to technology improvements, supply/demand changes, and larger turbine sizes, though repowering is a new cost.

1. Wind Energy Trends in Denmark
Aisma Vitina, Ea Energy Analyses
SEAI and IEA Wind Task 26 seminar
”The Cost and Value of Wind Energy”
Dublin, May 26, 2014

2. On the menu
• The particularities of the Danish (wind
power)
– Early adoption and high penetration
– TSO’s involvement and cost sharing
– Public access to data – and ownership
– Repowering (*)
• Wind energy project cost drivers
• Cost development over time in
Denmark
2

3. THE PARTICULARITIES OF THE
DANISH WIND POWER
3

4. The particularities of the Danish wind
power: Early adoption & high penetration (1)
4
33.2%
0%
5%
10%
15%
20%
25%
30%
35%
0
1000
2000
3000
4000
5000
6000
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
Windpower%inelectricity
generation
Cumulativewindpowercapacity
(MW)
Onshore capacity [MW] Offshore capacity [MW]
Wind power % in electricity generation
Source: Danish Energy Agency ”Energistatistik2013”, Energinet.dk

5. 5
Source: American Wind Energy Association(based on Berkeley Lab estimates,data from Navigant and EIA)
The particularities of the Danish wind
power: Early adoption & high penetration (2)

6. The particularities of the Danish wind
power: TSO’s involvement and cost sharing
6
• The developer only pays for the connection from the turbine to the
coupling point
– Transformers, substations, grid extension – cost socialized (covered by the grid
company/-ies)
• Also for offshore projects
– Exploratory studies (geophysical, geotechnical, metaocean and environmental
assessment) carried out by the TSO
• Impact on overall project risk and costs
Source: IEA Task 26 WP1 Report 2011, Energinet.dk.Photo source for the illustration: http://blog.journals.cambridge.org/,http://meship.com/
Wind power project Existing grid infrastructureNew connection line
Paid for by the
Developer
Paid for by the
Grid company

7. • Individual turbine-level data
starting 1978 reported and
published
• A regulation stipulating local
residents’ ‘right of purchase’
of 20% of the wind power
project shares at cost price
– Audited share purchase
offers (incl. cost data) are
publicly available
– Contributes to high
acceptance rate and
availability of sites across
the country (terrible noise
vs ‘the sound of money
being made’)
7
The particularities of the Danish wind power:
public access to data – and ownership
Interactivemap screenshot from http://vindinfo.dk/

8. WIND ENERGY PROJECT COST
DRIVERS
8

9. Wind energy project cost drivers: key
factors
• Materials, components, labour
– Especially significant in the period leading up to 2008
• Supply-demand dynamics, competitive landscape
– Over-supply in the early 2000s, bottle-necks leading
up to 2008
• O&M costs
– Increase in turbine size / production, among other
things, decreases per-kWh O&M costs
– More mature technology, higher capacity factors,
lower administration and other costs per MW
9
Source: Nielsen, P. ”VindmøllersØkonomi”

10. Wind energy project cost drivers: size
• Continuous turbine size increase over the past 20 years
• In 2012 and 2013 in Denmark, the newly-installed turbines were
predominantly 3 MW
10
Source: data from Stamdataregisterby the Danish Energy Agency (2004 and 2007 excluded due to limited sample), turbine sizes 100kW+
0
20
40
60
80
100
120
0
500
1000
1500
2000
2500
3000
3500
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2005
2006
2008
2009
2010
2011
2012
2013
Rotordiameter(m)
Hubheight(m)
Turbinecapacity(kW)
Average of Capacity (kW) Average of Rotor diameter (m) Average of Hub height (m)

11. Wind energy project cost drivers:
O&M costs
11
Source: Nielsen, P. ”VindmøllersØkonomi”. Data covers 1996 – 2008, all onshore turbines of nameplate capacity 600 kW+
• For projects 1996-2008 the average lifetime O&M costs (average for
years 6-13) estimated at ca.14.5 EUR/MWh (2012 prices)
• For new projects as of 2010, indications of 12.3 EUR/MWh (2012
prices)
– Significant reductions in O&M costs over time

12. Wind energy project cost drivers:
Repowering as a new cost category
12
Number of turbines by year of establishment
Year of establishment
Number decommissioned
Number existing
Total capacity (kW) by year of establishment
Year of establishment
kW decommissioned
kW existing
Source: Danish Energy Agency, Danish Wind Turbine Owners’ Association

13. • Introduction of Scrappage Certificates
– To continue deployment of wind resource
– To facilitate decommissioning of old and poorly sited turbines
• Turbines of 450 kW or less can be replaced with new and more
efficient wind turbines at an additional subsidy
– Scrappage certificate -> additional subsidy for the newly installed
capacity
– Several subsidy regimes depending on the time period:
• 0.02 EUR / kWh for 12 000 FLH of double the decommissioned capacity (upper
limit of market price + subsidy at EUR 0.05 / kWh)
• 0.01 EUR / kWh for 12 000 FLH of double the decommissioned capacity (fixed)
• Total pool of decommissioned capacity: 175 MW
• Scheme in force: 2005 – 2012
• An example from 2013 project proposal Nørhede-Hjortmose (22 *
3.3 MW): compensation of 0.5 M EUR per turbine
13
Source: Danish Energy Agency http://www.ens.dk/undergrund-forsyning/vedvarende-energi/vindkraft-vindmoller/vindmoller-pa-land/skrotningsordningen,
Wind energy project cost drivers:
Repowering as a new cost category (2)

14. COST DEVELOPMENT OVER TIME
14

15. Cost development over time in
Denmark (onshore)
15
-
500
1,000
1,500
2,000
2,500
3,000
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
€/kW(2013prices)
Cost of turnkey onshore wind power projects in Denmark 1981 - 2012
Source: Nielsen, P. ”VindmøllersØkonomi”
Lower
demand
than
expected;
oversupply
Steel /
material,
wage and
EBIT
increases
Overall
price
decrease
post-2008
crisis

16. 16
Cost development over time in Denmark (vis-à-
vis other countries): capital cost 2003-2009
Source: Lantz, E., Wiser, R., Hand, M. et al ”IEA Wind Task 26 The Past and Future Cost of Wind Energy”, 2012

17. Cost development over time in Denmark
(vis-à-vis other countries): LCOE 2008
17
Source: Schwabe, P., Lensink, S., Hand, M. et al ”IEA Wind Task 26 Multi-nationalCase Study of the Financial Cost of Wind Energy”, 2011

18. Aisma Vitina
Ea Energy Analyses
Mobile: (+45) 603 917 02
E-mail: av@eaea.dk
Frederiksholms Kanal 4
1220 Copenhagen
Denmark
www.eaea.dk
Thank you