The Hindu Business Line : Power and profits in the wind

LAST WEEK, Torben Larsen, my Danish friend, and I flew a cross-country check ride from Bremen to Copenhagen. Most of the 35-minute flight time, the winds were off the ocean and there was not much in the way of strong crosswinds.

As we approached the Danish territory, a wide array of wind turbines in the waters off southern Denmark emerged into view. We were flying over the town of Nysted, home of Denmark's newest and one of the world's largest offshore wind farms. At Middelgrunden wind farm, a wall of 200-foot windmills dominated the horizon with their silently spinning rotors glinting in the glare of the sun.

Wind power is not a new idea. Wind has been harnessed for over than 2,000 years, with the first known application of the technology being in Persia. The concept of windmills was brought to Europe by the Crusaders, and then improved upon by the Dutch and the English.

During the 1100s, windmills were used in Europe to grind grain. Typical European windmills use four blades and spin on a horizontal axis. In 1971 the world's first offshore wind farm, a 5-MW plant, began operating off the coast of Denmark.

While Germany leads the world in terms of wind energy, with more than 14,000 MW of installed capacity and supplying 3.5 per cent of that country's power, Denmark has the world's highest proportion of electricity generated by wind — more than 20 per cent.

Danish wind-energy advocates say the success of the industry was achieved by making the offshore wind farm projects a kind of public trust, even while addressing the concerns of environmentalists and the local communities. Since the 1970s, the Danish government has promoted the industry through tax incentives and subsidies, enabling it to grow steadily. Perhaps, the biggest breakthrough was the development of the Middelgrunden Offshore Wind Farm Cooperative, which was the first large project.

Less than 3.5 km off the Copenhagen harbour, 20 turbines, each producing 2 MW, this project provides energy to some 40,000 households.

For most Danes, the towering turbines are anything but an eyesore, or a threat to the environment. In fact, they are featured on postcards and touted as attractions by tour guides on ferry-boats. They are the pride of the local Greenpeace office, which even owns shares in the project.

The Middelgrunden wind farm project, completed in 2001, paved the way for two other larger offshore parks. The massive Horns Rev offshore wind farm, 12 km off the Denmark's west coast was completed last year and is the largest offshore wind farm in the world.

Horns Rev has 80 towering wind turbines, each producing 2 MW, enough to power 133,000 households.

It lies along a reef that harbours fish, seals, porpoises, and migratory birds. Intense environmental impact studies and assessments were ordered as part of the approval process.

In fact, big offshore wind farms such as the Horns Rev have become something of a tourist attraction with an information centre on the benefits of wind power and a lighthouse where binoculars are rented to view the colony of windmills.

The other offshore project is on the east coast, and is expected to be completed later this year.

A Conservative party that now leads Denmark's governing coalition also supports wind power, but believes the government subsidies should be cut back for an industry that is strong enough to stand on its own. The key to the early successes in Denmark came with making the wind farms collectively-owned enterprises.

For instance, the Middelgrunden is owned by 8,500 individual investors, who own half the project, and the municipal utility provider, the other half. The two other large offshore wind farms are being built by large public utilities that foresee big profits in wind. The wind farm industry has created some 25,000 jobs.

The pro-wind farm movement, including groups such as the Wind Mill Owners Association, boasts of a hundred thousand members who either own small windmills or have shares in larger wind farms.

In a country of five million people — about the size of Bangalore or Hyderabad in terms of population — the Danes are currently producing 19 per cent of their electrical energy from wind with a goal of 50 per cent by 2030.

At the height of the last long winter, the high wind power production in January was a record 32 per cent of the total supply.

It must be recognised, however, that the government does guarantee a 10-year fixed price to the owners for the electricity produced. Currently, this is 5 euro cents per kilowatt hour.

Not only has Denmark rejected the nuclear option, but its Ministry of Environment has also banned the construction of new coal plants. The existing coal plants will be converted to other fuels or decommissioned by 2030.

New renewable fuel power plants are being built that use farm wastes such as straw, wood pellets, and biogas from cow and pig manure. The excess heat from the power plants is piped to homes and businesses thanks to this CHP — Combined Heat and Power — policy.

Denmark has certainly progressed from a situation where cheap, imported oil was generating 90 per cent of the electricity produced till the oil crisis of 1974.

The conventional power plants fill the gap when wind power falls, though it is not an "all-or-nothing" situation; some place wind is always blowing. No new peaking units have been built in Denmark. The grid power policy is to accept all available wind power.

Denmark is a model of efficiency and sustainability. The country became self-sufficient in energy in 1997.

In fact, it now exports 50 per cent of its oil, 30 per cent of the natural gas, and 19 per cent of the power generated with a positive balance of payments of some 2 billion euros a year.

Lowered energy consumption and increasing reliance on wind power have enabled Denmark more than meet the Kyoto Protocol requirements on carbon-dioxide emissions. Its CO{-2} emissions have fallen by 15 per cent since 1990.

An international powerhouse in the wind industry, Danish companies control an estimated 50 per cent of the $4-billion worldwide wind industry market.

From a fishing boat in the Copenhagen harbour, Larsen proudly pointed to the harmonious arc of the 20 wind turbines that stand at approximately half kilometre intervals and hug the coastline.

Wind surfers worked the waters just beyond the shadows of the turbines. And fishing boats set up nets not more than a few hundred feet off the concrete base of the turbines, finding that the fish are actually drawn to the structure that the foundations provide.

(The author is former Europe Director, CII, and lives in Cologne, Germany. Feedback may be sent to mohan.murti@t-online.de)

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