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Wind Power: What We Can Learn from Denmark

by: Jeff Wilson November 26, 2008 | about stocks: CRPWF.PK / FAN / GCTAF.PK / GE / MHVYF.PK / NRDXF.PK / PWND / SI / VWDRY.PK

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Common knowledge states that wind energy's big drawback is that the wind doesn't blow all the time, so you have a big problem when it doesn't. Denmark's DONG Energy doesn't see it that way.

By 2007, Denmark was getting about 20% of its electricity from wind. As an existing power company integrating wind, it has enough conventional generation to supply demand any time the wind isn't blowing. The problem is when the wind is blowing during a time of low demand (i.e. overnight). In that situation, the wind farms generate more electricity than needed to meet demand. In other words, there is not a market for all the electricity that can be generated by wind, and as a result, DONG Energy is giving up a significant portion of the return on their investment because some of the electricity goes unsold. This is particularly frustrating because DONG Energy is under pressure from Danish political leaders to add more wind energy.

Enter the electric car...

DONG Energy has determined that a viable solution to their problem is to convert a large part of Denmark's vehicles to plug-in electric. Since most electric vehicles are charged overnight, this creates an ideal market for excess wind capacity. In order to fast-track the electrification of Denmark's cars, DONG has signed a letter of intent with Palo Alto-based Better Place, Inc., to collaborate in introducing electric vehicles and charging infrastructure to Denmark. Better Place designs and installs intelligent charging stations that communicate with a central office, and Better Place has a special working relationship with Renault/Nissan (NSANY) to supply plug-in electric cars to customers, starting in volume in 2011.

The National Energy Research Labs has done extensive research to determine how much wind power could be integrated into our existing U.S. grid before running into major problems. The answer: 20%. Denmark's experience confirms that this was an accurate prediction.

On our present trajectory, it will be several years before wind power reaches 20% of the U.S. grid. This means we can benefit from observing how Denmark deals with this limitation. It will suggest to us whether the growth in U.S. wind installations will stall out around 20%, or if they can go further (and how much further).

The wind turbine manufacturers supplying the U.S. market are, in order of units installed in 2007: GE Wind (GE), Vestas (VWDRY.PK), Siemens (SI), Gamesa (GCTAF.PK), Mitsubishi (MHVYF.PK), Suzlon [NSE: SUZLON.NS], Clipper (CRPWF.PK), and Nordex (NRDXF.PK).

Disclosure: No positions

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This article has 24 comments:

Nov 26 12:20 PM
Denmark is a small country and its entire grid experiences similar wind speeds. That's not the case in the US.
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Nov 26 01:42 PM
Why not pump water from wind power into large natural earthen basins with electric pumps at low peak periods, and then drain into turbine generators when needed for load equalization ?
LWH
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Nov 26 03:37 PM
In response to Heissman's question --

Denmark is a relatively flat country, hence they do not have significant hydro generation power plants. natural earthen basins which have low head of water will not do. We do in the US but there needs to be transmission lines that connect windpower to hydro dams before this can happen. Again, the limitation is very apparent in the Texas to Canada Boone Pickens wind corridor. This area is far away from areas that can be dammed or already has hydrodams. High capacity transmission line infrastructures have to be built.

This is one government project that Obama can invest on to generate US jobs in the next two years. He just has to make sure the power lines, steel towers, etc. (materials) should be made in the USA. Obama need to rein in the environmentalists who are sure to block projects like these because it "ruins" open space poeple's views and might impede the flights of migratory birds.
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Nov 26 10:14 PM
In support of candewish, Denmark's population is approximately that of the Dallas/Fort Worth metroplex and the peak load for that country is ~6,500 MW vs. Texas (ERCOT) load of 65,000 MW and US load of ~800,000 MW. It's difficult to see how the Denmark data is scalable to the US .
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Nov 26 10:36 PM
Denmark has the second dirtiest electrical grid in Europe, as the other 80% (really 90%) of the power comes from a coal plant. And oh yeah electrical rates that are about 3 x those in North America. Sounds good. Lets triple your electric bill. Puts more money into Vesta and GE, though. Don't forget poor Goldman Sachs - one of the leading wind developers in the US. Wind power in North America is about one thing: Tax avoidance.
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Nov 27 08:51 AM
denmark's geography & prevailing weather conditions are unique, favoring wind electric power. netherlands used windmills for hundreds of yrs for the same reason. in denmark the wind-power generation is close to load centers, facilitating xmission.
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Nov 27 09:07 AM
Store the excess wind produced electricity by adding water and creating hydrogen. The electricity generated from the burning of hydrogen is clean and ready when needed.
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Nov 27 09:13 AM
I want to thank you Tom Andersen for your observation: the price of electricity in Denmark might be the highest in the industrial world. Sure, Denmark is a wonderful country, but instead of harassing Sweden until they closed the reactors at Malmö, the government of that country should have asked them to move those reactors to another part of Sweden, and to sell them more power.

There is something important here. If the Scandinavian countries that are fairly similar in culture cannot work together where electricity and environment are concerned, how will it be possible to construct a joint energy-environmental policy with the rest of Europe - or better, with the rest of the world as the know-nothings in the Swedish, Danish and Norwegian media think is possible.
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Nov 27 10:57 AM
Denmarks solution works, that is what counts. The takeaway is that switching to differnet sources of power requires new ways of thinking to take advantage of differnet energy generation and storage solutions. Different kinds of solutions will work under differnet circumstances.
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Nov 27 11:10 AM
Additional question related to power would be besides wind and geothermal options is Dennmark investment into wave power which is overlooked. Would help to diversify the power structure to support the EV being proposed.

However, the grid will need large battery capability to store the electricity for use at night when the cars are being recharged. Batteries as storage is being overlooked in all these alternative energy solutions. Need to store to meet peak demand.
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Nov 27 12:36 PM
Bob Lunn, Denmark's solution works because the Danes dont mind paying two or three times as much for power as the Swedes. In fact if the Swedes had not gone into the EU and hadn't closed the two reactors at Malmö, the Danes would be paying four or five times as much. The so-called "new" solution that they should be thinking about is constructing a couple of nuclear facilities.

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Nov 27 12:43 PM
Just as we enjoy a day of turkey and cheap prices at the pump OPEC is planning another huge cut in production to raise prices.

www.gmanews.tv/story/1...

This is probably going to be one of the bleakest holiday seasons most of us have seen in our lifetimes. Not enough credit is being given to the high gas prices this past year and it's serious damage on our economy and society. That one factor alone has caused serious stress in both individuals and businesses. A record number of homes and jobs have been lost as a direct result. And, while we are doing the happy dance around the lower prices at the pumps OPEC is announcing cuts to manipulate the prices upward again. We must get on with becoming energy independent.We can't take another year like this past. Many areas of this country are well suited to generate electricity by wind. Why not use some of the billions in bailouts and stimulus handouts to get some of these things set up and running?
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Nov 27 02:34 PM
Time for investors to wake up to the fact that WIND POWER is the only alternative clean energy source available today vs the alternatives of coal or nuclear. China needs power today and China must use wind because coal pollutes and nuclear would take 15 years. APWR in China is going to be a wind monster over time given the chinese are going to back a China wind company vs giving the business to outside china vendors
www.Wind4me.com

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Nov 27 02:36 PM
Wind Stocks were up 20% Wednesday
AMSC up 20%, ZOLT up 26%, APWR up 19%
why fight the tape and the trend???
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Nov 27 04:48 PM
Comment on Candooman's comment:

"He [Obama] just has to make sure the power lines, steel towers, etc. (materials) should be made in the USA."

Um, unless this infrastructure is actually procurred by, and remains in the posession of the government (and even then, it would be subject to the USA's obligations under the WTO Agreement on Government Procurement), there is no way that Obama can stipulate that all the goods are made in the USA and not run the risk of a challenge from another WTO member. That said, whether the steel for the towers is domestic made or imported, the increased demand on the world market could be enough to raise steel prices -- good for steel makers everywhere, but not necessarily for other industries.
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Nov 27 08:28 PM
Beacon Power makes a flywheel storage systems that is up and running. Scaled up a hundred fold it might be usable for storage but right now it will be used for grid management.
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Nov 28 03:21 AM
Mr. Banks: Isn't it amazing how the same ideas and debunking of same repeat over and over? These discussions haven't changed over the past 6 months.

Economic Conditions have changed drastically however but no one seems to notice. What was feasible with oil above $120 is no longer viable with oil below $60.

Those believing that Peak Oil is a myth or was a Conspiracy will find it very hard to find funding for Wind/Solar/Wave/Geothe... etc. technologies while oil remains low. But all of them agree that oil should remain low for the foreseeable future.

Greenhouse Gases keep this planet from becoming an Iceball but here we are playing games with the atmosphere without knowing the effects that massive uses of non emmission Technology will have on an atmosphere which has adjusted over the last 150 years to increased levels of every type of Greenhouse Gas.

No one has a handle on when "enough will be too much", since there is no coordination on a Global scale as to who will build what.

In the 70's, all of the Models pointed to the oncoming Ice Age, now its a Global Meltdown. Does this mean that reversing course rapidly will Create a new Ice Age?

I certainly don't know. Computer Models generate numbers from pre-programed statistics which provide support for whomever wishes support. Greenhouse gas concentrations are not the same over the USA as they are over India.

This winter might prove to be a harbinger of the future.
There is a Global reduction in CO2 emmissions the likes of which has not been seen for decades. It is abrupt and unlikely to turn up anytime soon. Deep Recessions around the world will reduce CO2 output drastically.

I personally believe it will be a harsh cold winter, one that will be felt globally.

This post is specifically for you Fred. You have the experience to be able to make a qualified judgement.
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Nov 28 07:19 AM
skibare,
You are right on.
Get it when the going is good.
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Nov 28 11:47 AM
Usually vicious upside rallies are the result of short covering rather than new money coming in. The shorts are taking profits. Once they are done, they will come back in to take away what was another opportunity to sell.

Wind and Solar are on the same side of the coin as Oil. Oil drops both of the latter will drop also.

Neither Wind or Solar have access to the financial credit once available. The primary mover is this sector is dead. Lehman no longer exists. Existing credit lines for most of these startups are in jeopardy. Performance Covenants require maintenance of a specific price for a given company. Breach of that price for a specific time will trigger unforeseen consequences. Who survives is moot.

IMO

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Nov 28 11:52 AM
The answer to this is simple - use the excess electricity to split water into hydrogen and oxygen - this can then be stored for peak demand times. Burning these both will create heat to drive generators and to heat homes and the byproduct is water which can be recycled back again for electrolysis.
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Nov 29 01:06 AM
In a Lab, under controlled conditions everything sounds plausible except perpetual motion which does not exist because a frictionless surface does not exist. The same thing applies in physics, heat is lost and energy is required to repeat the process. Water has to be stored in sufficient quanties to produce the H2 and O2 which are are Stored where? Burned and heat transferred without loss to generators,how? The recreated water needs energy to ship it back to storage to repeat the process, there is less water now, it has to be replenished or is the process a Perpetual Motion Machine where both matter and energy are constant.

Please tell me the name of the company that plans to introduce this product. The world will rush to its doors to finance it. I will make Billions as a ground floor investor.

IMHO

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Nov 29 05:38 PM
paultout, You said "Isn't it amazing how the same ideas and debunking of same repeat over and over? These discussions haven't changed over the past 6 months." But what you said after that are the same old ideas that have been touted and debunked on these sites for a long time. You are the same as the people you are complaining about.

You said “But all of them agree that oil should remain low for the foreseeable future.” This is inaccurate. The price of oil HAS TO go back up. The current low price is artificially low because of the economic collapse and the artificially high dollar from the worldwide flight to safety. You can debate all you want about whether we are past “peak oil” or not. But, it doesn’t matter because we are definitely past “cheap oil”. Also, the emerging markets are still emerging. Just visualize 2 billion people driving Hondas.

In 2 years, oil will be much higher, maybe at $100/barrel plus. There are many people saying this, counter to what you say. Just listen to the oil analysts on CNBC. Because of all the money (trillions with a “t” and an “s”) being pumped into world economy by the central banks, I hear analysts use the word “hyperinflation” just like the word “deflation” was being used a year ago.

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Nov 29 05:44 PM
This Denmark "pilot project" is great. Because if they get it working in Denmark, then it will work in the US, because Denmark is a more restrictive environment (smaller with less natural balancing of wind) than the US.
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Nov 30 06:40 AM
Road Runner, since when is your name Fred Banks?

What did I say after that post?

You keep quoting from that same post but out of context: IE "but all of them agree that oil should remain low for the foreseeable future." referred specifically to those that believe in an Oil Conspiracy and consider Peak oil to be a Myth. (From the same paragraph, yet!)

I did not say a single word regarding my own view on Oil. Apparently, its not enough for you to push your own ideas onto the public at large. You have to prevaricate what was said as well.
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