Policy & MarketMore
Danes may delay offshore wind projects to fund solar boom
The Danish government has proposed delaying by at least a year the planned connection schedules of the Horns Rev 3 and Krieger’s Flak offshore wind projects to conserve money for the country’s unexpected PV boom.
The Danish Ministry of Climate, Energy and Building is pushing the proposal as part of a wider rethink on solar energy in Denmark.
Only a few years ago Denmark, a champion of renewables and home of wind-energy giant Vestas, anticipated having a meagre 6MW of installed PV capacity in 2020, according to the Renewables Action Plan it submitted to the European Commission.
To the surprise of many, however, cloudy Denmark has over the past year stormed past the grid-parity threshold for residential PV systems as a result of the country’s high retail electricity prices. PV demand has been further stoked by the country’s generous net-metering scheme.
Having ended 2011 with 16MW of PV capacity – already beyond its official 2020 target – Denmark went on to add another 100MW in the first eight months of 2012, and analysts believe it may double that figure by the end of the year.
By comparison, Denmark added 178MW of wind capacity last year, albeit from a far higher base.
“The solar surge has been a big surprise to everybody,” one source in the wind industry tells Recharge.
Sources agree that the Danish government is largely pleased with the PV boom, and its latest plans are intended to encourage growth in a healthy direction, rather than tempering it.
The current proposal – not yet formally adopted by government – would lower incentives for individual PV installations in line with falling module prices, while broadening the base of homeowners and building types eligible for support.
The government says the recent boom means that it is “appropriate to consider solar more strategic in Denmark’s energy supply”, although sources say it is unlikely to change its official targets any time soon.
To the dismay of the wind industry, the government has turned its eye to offshore wind to find money to cover the solar surge.
Next year the country will put Horns Rev 3 and Krieger’s Flak on the auction block – the last Danish offshore projects to be built before 2020. With every offshore wind zone in the main European markets already spoken for, interest among bidders is expected to be high.
Those two projects were expected to be linked up to the Danish grid in 2017. But under the ministry’s new pro-solar plan, they would not be brought onto the grid until 2018 at the earliest.
Jan Hylleberg, chief executive of the Danish Wind Energy Association, says that although the delay would still mean the projects will be brought online before 2020, developers would have “less flexibility” in their construction schedules – increasing both risk and cost.
Hylleberg claims the government’s strategy is akin to “peeing in your pants to keep warm”, as it would solve short-term headaches at the cost of increasing the long-term cost of Denmark’s energy system.