About the Danes

As we all know, you can demonstrate just about anything with statistics. It depends on how you present the information.

Take for example this media report last month: “Denmark generated enough wind energy to power the entire country’s electricity needs.” Another said: “Wind energy supplied all of Denmark’s power needs on one day.”

(The EU wind lobby described this as “a very impressive feat” and a demonstration that “renewables can truly be a solution to Europe’s needs.”)

Contrast this with a report that in 2016 the technology’s share of Danish electricity production fell because last year was the least windy in six years (after a much-hyped 2015 was the most windy since 1994).

The 2016 wind share was 37.6 per cent, but this, too, needs to be looked at carefully because it is production, not Danish consumption.

The whole Danish power story is interesting – and of interest to us here at present because Denmark is on the visiting list for NEM security inquiry chairman Alan Finkel, who is now overseas exploring international experiences in the context of his domestic task.

More than 40 years ago nine-tenths of Danish power supply was oil-fuelled. The crises of the 1970s not surprisingly made them look to other sources (notably initially coal) and technology development has enabled them in the past 12 years to embrace one of their best home resources: wind. Today Denmark has more than 5,000 megawatts of wind capacity (a bit less than double what we have in Australia as a whole).

I can’t resist interpolating here that the Danes have made full use of their share of North Sea oil and gas while embarking on their energy transition. Denmark today is a net exporter of oil.

That gets no media chatter but the windy stuff gets boosted regularly, especially by those websites of green persuasion (including here some of the mass media outlets). What you usually don’t see mentioned in the same story is that the Danes also rely on 4,200 MW of conventional generation and 2,300 MW of combined heat and power plants in 670 locations (‘cos it’s darned cold in that neck of the woods for long periods). You also don’t get told that a great chunk of the heating energy the Danes rely on comes from wood pellets and wood chips imported from Eastern Europe and Canada. (Nor, to be fair, that, like the Germans, the Danes have gone gangbusters on residential energy efficiency, a means of easing the pain of high costs.)

You certainly don’t get told in most reports that the Danes have two electricity grids and that they are quite poorly interconnected while they have very good links to Norway, Sweden and Germany.

West Denmark is where most of the green generation is located in the most wind-turbined place on the planet but the country’s load isn’t there – so a lot of the wind output leaves the country and the populated areas benefit from those international links.

Without burying you in detail, generation output inside Denmark is around 32,000 gigawatt hours a year (a little more than South Australia and Tasmania combined) and at present some 11,000 GWh comes from coal plants, 2,100 GWh from gas turbines, 5,000 GWh from burning biofuels and waste and 13,000 GWh from wind power.

A big thing is the import/export business. Denmark gets up to 6,600 GWh a year from Sweden (either hydro or nuclear) and around 3,000 GWh from Germany (mostly brown coal generation or nuclear).

Critically, the wind sector in Denmark depends for its domestic utilization efficiency on the link to Norway’s hydro system – which can dispatch promptly when wind isn’t available. When the winds are good, electricity can be sent in to Norway for storage in hydro systems.

The long and the short of the Danish story is that the country exports about 10,000 GWh of power a year (that’s wind) and imports about 13,000 GWh (of which nuclear energy is a quarter to a third). Far from “running on wind power” even on some very windy days, the Danes consume roughly half of their wind farms’ output over a year and they can do so because of the system of which they are (a small) part.

There is another very important angle to this story.

Households in Denmark share with those in Germany the “honor” of having the European Union’s highest residential power bills – 30.7 euro cents per kilowatt hour for the Danes and 29.5 cents for the Germans.

The overall tax share of Danish bills is 57 per cent (not all related to renewables subsidies).

I have seen it reported that Danish householders pay a third more than the country’s average spot price for electricity in the renewables-specific levy included in their suite of government-imposed bill burdens – and also that the wholesale price of the power they use makes up 15 per cent of their bills, with network charges accounting for 18 per cent.

One of the quirks of this set-up is that, while wind generation is heavily subsidized in Denmark, because this production is substantially exported at market spot prices, the subsidies are also exported.

It needs to be mentioned that, thanks to nature and home-grown ingenuity, the Danes have parlayed wind power in to a manufacturing benefit, delivering jobs and economic gains. Denmark is today the world’s largest exporter of wind farm equipment.

How one translates all this in to some form of lesson for Australia – except for the deep green boosters who want to highlight information that supports their cause without the overall context – is a question indeed. We shall have to wait to see what Finkel draws from his visit.

Perhaps he will be talking to DONG Energy, the dominant Danish generator and as recently as a decade ago one of the most coal-intensive utilities in Europe, now aiming to eliminate coal plants from its fleet by 2023. I was struck by this comment in a recent media interview with one of its executives: “Today, there isn’t really a good replacement for coal if you want to produce heat and power at a large scale while complementing wind energy and solar. When it’s not windy, you need something else and sustainable biomass can be that something else.”

The DONG man hastened to point out that the wood with which DONG is replacing coal in its generation “doesn’t come from the Amazon.” It is sourced from around the Baltic Sea and in North America.

I would dearly love to see our local Greens discussing replacing, say, Liddell’s coal with forest residue from Tasmania and the mainland…..or reorganising our system to include nuclear power.



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